ROE (Return on Equity) measures how efficiently a company uses shareholder equity to generate profit. Warren Buffett's #1 metric — he looks for companies with consistent ROE > 15% over 10+ years.
📊 Interpretation
- ROE > 20%: Excellent (Buffett-worthy)
- ROE 15-20%: Very good
- ROE 10-15%: Average
- ROE < 10%: Below average
⚠️ Warning
- High ROE with high debt = leveraged — risky in downturns
- Check Debt/Equity ratio alongside ROE
- Compare ROE within same industry (banks vs tech are very different)