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1. Shareholder Equity Ratio A ratio used to help determine how much shareholders would receive in the event of a company-wide liquidation. The ratio, expressed as a percentage, is calculated by dividing total shareholders' equity by total assets of the firm, and it represents the amount of assets on which shareholders have a residual claim. The figures used to calculate the ratio are taken from the company's balance sheet. Shareholder Equity Ratio = Total Shareholder Equity/Total Assets 2. Debt-Equity Ratio A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets. Debt-Equity Ratio = Total Liabilities/Total Shareholder Equity 3. Return on Equity Ratio The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. Return on Equity Ratio = Net Income/Shareholder's Equity |