ROE (Return on Equity) is an important indicator for evaluating a company's profitability, and it is often referred to by investors when making stock investments. Specifically, ROE can be utilized in the following ways:
Evaluating a company's profitability：ROE is an indicator that shows how efficiently a company is turning its equity into profit. Companies with high ROE are effectively using their equity to generate profits. Therefore, companies with high ROE may be attractive as investment targets.
Comparing between companies：By comparing the ROE of companies in the same industry, you can evaluate which company is operating more efficiently. Companies with high ROE can be said to have a competitive edge over their peers.
Formulating investment strategies：Using ROE, it is also possible to adjust the balance of your investment portfolio. For example, by investing in companies with high ROE, you can improve the return of your portfolio.
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