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Home Categories Financial Ratios Return on equity (ROE) is a measure of a company’s net income divided by its shareholders’ equity. Return on invested capital (ROIC) is the amount of money a company earns in excess of the average cost it pays for its debt and equity capital. Return on investment (ROI) is a popular profitability indicator used to evaluate the effectiveness of investments. Return on revenue (ROR) is a measure of a company’s profitability based on the amount of revenue generated. Risk-adjusted return on equity (RORAC) is commonly used in financial analysis, where various projects or investments are valued based on the risk of capital. Income per employee is an important ratio that roughly measures how much money each employee brings to the company. Roy’s “safety first” rule measures the minimum income threshold an investor has for a portfolio. Certified public accountants use audit sampling to determine the accuracy and completeness of account balances. The equity ratio shows how much of a company’s assets are financed by issuing shares rather than debt. The solvency ratio examines the firm’s ability to repay its long-term debts and obligations.