In the ROE formula, the numerator is net income or the bottom-line profits reported on a firm’s income statement. The ...

Net earnings can be pulled directly from the earnings statement ... debt or equity investments, either of which could dilute or decrease shareholder value. In our above example, Joe's Holiday ...

To illustrate, he uses the example of buying ... be the last line on the income statement. Next, move over to the balance sheet to calculate shareholders' equity, which is total assets minus ...