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Glossaries

Term Definition
Return on equity

The amount of net income returned as a percentage of shareholders equity. It is a measure of how profitable a company is able to deploy its equity.

Return on equity = Net income / Shareholders' equity

Author - Nick Kraakman
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Retained earnings

The amount of earnings left after dividends have been paid to shareholders. This money can then be reinvested into the company.

Retained earnings = Net income - Dividends

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