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A Refresher on Return on Assets and Return on Equity

Harvard Business Review

What is Return on Equity (ROE)? Unlike ROA, you want the ROE to be as high as possible, but there are limitations. Knight explains that “one company may have a higher ROE than another company because it borrowed more money and therefore has greater liabilities and proportionately less equity invested in the company.

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Would You Want Carl Icahn to Run Your Company?

Harvard Business Review

During the last few years the market value of the common stock of companies that we were in, amazingly rose $55 billion and they were only $20 billion when we started buying." Icahn then goes on to contradict his assertion that "nobody can attack" corporate governance in the U.S. "We We can get a lot done as activists.

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Idle Funds are the Devil's Playground

Harvard Business Review

vision of financial world order; as Time magazine reported, he was "bursting with hubris over its booming equity markets and its just-announced 5.6% Mahathir stood his ground, not just at Davos but in the financial markets, by refusing the IMF's aid, reducing Malaysia's interest rates, and restricting currency trading.

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End the Religion of ROE

Harvard Business Review

corporation than "what's the ROE on that?" Conversely, why market cigarettes? ROE justifies the means. To an extent not widely recognized, it was an equation in the first place that gave ROE the power to dominate not just investment decisions, but an entire business culture. There is no more powerful question in a U.S.

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