Return on Equity is a number I like to take a gander at before hitting the “buy” button. It provides some insight as to how well the company is using the investments that people like me (a shareholder) make.
Return on equity is the net income divided by shareholder's equity. Net income is the money that the company made over a period of time and shareholder's equity is the amount of money that shareholders (i.e. me) have invested in the company at that period of time.
A return on equity of greater than 10% is where I like to be investing. When it comes to return on equity bigger is always better. It means that the company is making more money on every dollar that investors have in the company.
To find the return on equity for a given compnay:
1.) Go to: http://money.ca.msn.com/investing/
2.) Enter the ticker symbol of your chosen company in the “Name or Symbol” field (note “.to” is not required because Canada is listed as the market already)
3.) Click on Highlights under the Financial Results header in the left tool bar
4.) Revenue per share is listed fourth from the top in the table displayed
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