Finance & Accounting / FP&A
Return on Equity ROE (DuPont)
The profit earned for common shareholders per dollar of their equity, and, decomposed, a map of whether that profit came from margin, efficiency, or leverage.
The fork, why two teams get different numbers
ROE looks simple until you ask *why* it is high.
In the Metric Library
- The full fork, both definitions worked all the way through
- The trap that makes the number lie, on a real export
- Every formula variant, spelled out
- The reconciliation anchor, what to tie it to and when to refuse
Reference: CFA Institute (DuPont analysis) · FASB ASC 505 (Equity) · FASB ASC 260