How do you find the return on equity?

ROE=(Earning available for common stockholders)/(common stock equity)

Return on Equity is a measure of the returns generated by every share of common stock of a company. High ROE does not mean any immediate benefits but an increasing ROE year-on-year means that the company is doing well and is able to grow on its profits.

Formula:

ROE = Net Income / No. of Shares

Net Income - This is the total income of the company after paying preferred stock dividends

No. of Shares - This is the total number of common shares in the market (Does not include Preferred Shares)