What Is ROE? — Return on Equity Explained
Direct translation: profit from equity capital.
Rephrased: "What percentage of net income equals the equity capital?"
The formula is:
Net Income / Shareholders' Equity x 100
For example, a company that started with 10 million KRW in capital and earned 3 million KRW in net income that year would have an ROE of 30%.
That is an incredibly profitable company.
However, ROE should not be blindly trusted either.
To give an extreme example: if the company with 10 million KRW in capital from above pays out 7 million KRW in dividends to shareholders, reducing capital to 3 million KRW, and then earns another 3 million KRW the following year, the ROE becomes 100%.
In practice, massive corporations like Samsung cannot easily do this, but mid-sized companies can.
You must closely analyze the actual company and its industry before making judgments.