Library term·Portfolio & valuation
ROI & Return on Equity (ROE) Analysis
ROI measures return on any investment; ROE splits net income by shareholders’ equity — leverage and buybacks change ROE optics.
Authored by·Editorially reviewed
Onur Erkan YıldızFounder, Financial Engineer · CMB-licensed
Higher education in Financial Engineering and Money & Capital Markets. SPK (Turkey CMB) licence. 16 years across institutional markets, research, and quant-driven analytics.
Overview
ROI = (gain − cost) / cost, flexible across horizons. ROE = NI / equity; DuPont decomposes ROE into margin, turnover, and leverage.Practical takeaway
Compare ROE to cost of equity and peers; watch for one-off items and equity shrink from buybacks inflating ROE mechanically.How this connects to Finvestopia
When screening equity themes, pair ROE/ROI context with our indices and macro news drivers that shift the discount rate.Related entries
Educational content authored by our team — informational only, not investment advice.