Return on common stockholders' equity ratio

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Return on common stockholders' equity ratio (alternatively known as rate of return on common stockholders' equity) is a profitability ratio that indicates how well a company is managing debt financing to earn a profit for holders of common stock.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Return on common stockholders' equity ratio. A profitability ratio that indicates how well a company is managing debt financing to earn a profit for holders of common stock.

According to Managerial Accounting by Braun, Tietz (5th edition),

Rate of return on common stockholders' equity. Net income minus preferred dividends divided by average common stockholders' equity. It is a measure of profitability; also called return on equity.

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