Return on common stockholders' equity ratio
Return on common stockholders' equity ratio (alternatively known as rate of return on common stockholders' equity) is a profitability ratio that indicates how well a company is managing debt financing to earn a profit for holders of common stock.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Return on common stockholders' equity ratio. A profitability ratio that indicates how well a company is managing debt financing to earn a profit for holders of common stock.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Rate of return on common stockholders' equity. Net income minus preferred dividends divided by average common stockholders' equity. It is a measure of profitability; also called return on equity.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
