ROE

Abbreviation with 2 meanings

ROE
Stands forRules of engagement
Meanings2
CategoriesMilitary, Business & Finance

ROE has two meanings. It stands for Rules of engagement (military term) or Return on equity (finance).

Meanings of ROE at a glance

#ROE stands forContext
1Rules of engagementMilitary › Military Term
2Return on equityBusiness & Finance › Finance

1. Rules of engagement

Military · Military Term Abbreviations

Directives that define when, where, how and against whom military forces may use force, balancing mission needs with law, policy and politics. Troops often carry summarized ROE cards on deployment.

Example: Under the ROE, the gunner could not fire until the vehicle crossed the second warning line.

The US Standing Rules of Engagement, issued by the Chairman of the Joint Chiefs, preserve the inherent right of self-defense in all cases. Mission-specific ROE may be more restrictive. Debates about restrictive ROE featured prominently during the Afghanistan war. Pronounced as letters.

2. Return on equity

Business & Finance · Finance Abbreviations

Profitability ratio equal to net income divided by average shareholders' equity, showing how much profit a company generates with the money shareholders have invested. Investors use it to compare management efficiency across companies in the same industry, especially banks and consumer brands.

Example: With $1.2 billion of net income on average equity of $8 billion, the bank's ROE was 15 percent.

The DuPont analysis breaks ROE into net profit margin, asset turnover and financial leverage, revealing whether a high ROE comes from operations or from debt. Share buybacks and accumulated losses shrink equity and can inflate ROE, sometimes making it meaningless or negative. Warren Buffett has often cited consistently high ROE without heavy debt as a sign of business quality.

More military term abbreviations

  • R&R – Rest and recuperation
  • RC – Reserve component
  • REMF – Rear-echelon mother******
  • RIF – Reduction in force
  • RTO – Radiotelephone operator
  • S-1 – Personnel staff section
  • S-2 – Intelligence staff section
  • S-3 – Operations staff section

See all 248 military term abbreviations →

More finance abbreviations

  • RAROC – Risk-adjusted return on capital
  • RCF – Revolving credit facility
  • ROA – Return on assets
  • ROCE – Return on capital employed
  • ROI – Return on investment
  • ROIC – Return on invested capital
  • ROS – Return on sales
  • RRR – Required rate of return

See all 88 finance abbreviations →