Tools for financial analysis – Part II
By David Scott Peters
Restaurant Tip of the Week
Return on equity (ROE)
This ROE ratio is used to determine if an owner’s investment into the business is attractive or not. The calculation is performed by dividing net income by owner’s equity. A high ROE suggests the owner’s money was invested profitably.
Net income/Owner’s equity = ROE
David Scott Peters is a restaurant expert, coach, trainer and speaker, specializing in teaching independent restaurant owners how to use systems for increased sales and increased profits. He is the nationally acclaimed restaurant coach whose unique “SMART Systems” approach to boosting profits has earned him the title of, “The man who can walk into any restaurant in America and find $10,000 in undiscovered cash before he hits the back door – Guaranteed!” Visit www.TheRestaurantExpert.com for more. Learn more tips, tricks and secrets in David’s free five-part e-course, “How to Explode Your Restaurant Profits NOW!” Simply sign up to receive the e-course at TheRestaurantExpert.com.