Return on Net Worth (RONW), also known as Return on Equity (ROE), measures how effectively a company uses shareholders' equity to generate net profit. It is calculated as: RONW = Net Profit ÷ Net Worth × 100. A higher RONW indicates superior utilisation of equity capital. It is a critical metric for investors evaluating management quality and capital efficiency. India's most admired companies—such as those in the consumer goods and financial services sectors—consistently maintain high RONW, often correlating with strong long-term stock price performance.
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