With all the ratios that investors toss around, it's easy to get confused. Consider return on equity (ROE) and return on assets. (ROA). Because they both measure a kind of return, at first glance these two metrics seem pretty similar.
Both gauge a company's ability to generate earnings from its investments. But they don't exactly represent the same thing. A closer look at these two ratios reveals some key differences.
Together, however, they provide a clearer representation of a company's performance. Here we look at each ratio and what separates them.
Read more at:
https://www.investopedia.com/investing/roa-and-roe-give-clear-picture-corporate-health/
Both gauge a company's ability to generate earnings from its investments. But they don't exactly represent the same thing. A closer look at these two ratios reveals some key differences.
Together, however, they provide a clearer representation of a company's performance. Here we look at each ratio and what separates them.
Read more at:
https://www.investopedia.com/investing/roa-and-roe-give-clear-picture-corporate-health/
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