Why do equity holders care more about ROE than ROE?

Equity holders focus more on Return on Equity (ROE) than Return on Assets (ROA) because ROE measures the profitability of a company relative to the shareholders' equity, directly reflecting how effectively their investments are generating returns. High ROE indicates that the company is efficiently using shareholders' funds to generate profits, which is crucial for maximizing shareholder value. In contrast, ROA considers total assets, including debt, and may not accurately represent the returns attributable to equity holders alone. Thus, ROE provides a clearer picture of financial performance from the equity holders' perspective.