Goldman Sachs Explains The 'Return On Equity' Formula That Every CFA Test Taker Needs To Know

For investors, one of the most important metrics of a company is return on equity (ROE), which can be calculated by taking net income and dividing it by equity. "The decision to expand into the market of a competitor and seek additional return is not a decision driven by the expected profit margin, the expected return relative to the anticipated quantity of sales," said Jesse Livermore, the pseudonymous author of the Philosophical Economics blog. "Rather, it’s a decision driven instead by the ...