Return On Retained Earnings - RORE

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DEFINITION

A calculation to show how well the profits of the previous year were reinvested. RORE is expressed as a percentage. A high percentage would indicate that a company would be better off reinvesting into the business, whereas a low one would show that paying out dividends may be in the best interests of the company.

INVESTOPEDIA EXPLAINS

As an investor, it can often be difficult to quantify a company's worth by simply looking at its balance sheet. A RORE calculation can help to alleviate some of the confusion and help clarify exactly what the numbers are trying to say. A general rule of thumb for investors is to look for companies with high RORE that is reinvested regularly.


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