ROE shows how well management turns shareholders' money into profit. An ROE of 20% means Rs 20 of profit for every Rs 100 of equity.
High ROE driven by heavy borrowing is riskier than high ROE from strong margins, so read it alongside debt to equity.
Formula
ROE = net profit ÷ average shareholders' equity × 100
ROE (return on equity) on the Pakistan Stock Exchange
Across 436 listed companies with the figure, the median is 8.8%.