Recruiter's Glossary

Examples: COGS • Hedge Accounting • Foreign Currency

ROE (Return on Equity)

Term from Accounting industry explained for recruiters

Return on Equity (ROE) is a key financial measurement that shows how well a company uses its investors' money to make profit. Think of it as measuring how many dollars of profit a company makes for each dollar invested by shareholders. Accountants and financial professionals calculate and analyze ROE to help evaluate a company's financial health and performance. This metric is especially important in financial reporting, investment analysis, and company performance reviews. When you see ROE mentioned in a resume, it usually means the person has experience in financial analysis or performance measurement.

Examples in Resumes

Analyzed company performance metrics including ROE to provide quarterly reports to management

Improved Return on Equity by 15% through strategic cost-cutting initiatives

Prepared monthly financial reports tracking ROE and other key performance indicators

Typical job title: "Financial Analysts"

Also try searching for:

Financial Analyst Accountant Financial Manager Investment Analyst Corporate Finance Manager Business Analyst Finance Director

Where to Find Financial Analysts

Professional Organizations

Online Communities

Job Boards

Example Interview Questions

Senior Level Questions

Q: How would you explain the relationship between ROE and company growth to stakeholders?

Expected Answer: A senior professional should be able to explain how ROE reflects company performance, its connection to growth strategies, and how it compares to industry standards in simple terms that non-financial stakeholders can understand.

Q: What factors would you consider when analyzing ROE trends?

Expected Answer: Should discuss various elements affecting ROE such as profit margins, asset efficiency, and financial leverage, while explaining how these relate to overall business performance and strategy.

Mid Level Questions

Q: How do you calculate ROE and what does it tell you about a company?

Expected Answer: Should be able to explain that ROE is net income divided by shareholders' equity, and describe what good and bad ROE numbers typically look like in different industries.

Q: What are the limitations of using ROE as a performance metric?

Expected Answer: Should explain that ROE doesn't tell the whole story and mention factors like debt levels, industry standards, and the need to look at other metrics for a complete analysis.

Junior Level Questions

Q: What is ROE and why is it important?

Expected Answer: Should provide a basic explanation that ROE measures how efficiently a company uses shareholder money to generate profits, and why this matters to investors and management.

Q: How often should ROE be calculated and reported?

Expected Answer: Should know that ROE is typically calculated quarterly and annually for financial reporting, and understand its role in regular performance monitoring.