This is why Facebook's (NASDAQ:FB) high Returns can Convert into double-digit Revenue Growth

This article was originally published on Simply Wall St NewsFacebook (NASDAQ:FB) has had a great run on the share market, with its stock up by a significant 14% over the last three months. Since the market usually pay for a company’s long-term fundamentals, we decided to study the company’s key performance indicators to see if they could be influencing the market. In this article, we decided to focus on Facebook’s return measures, particularly on its ROE. If some parts feel a bit more complex, jump to the conclusion to get the important takeaways! Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company’s shareholders. Check out our latest analysis for Facebook How Is ROE Calculated?ROE can be calculated by using the formula:Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ EquitySo, based on the above formula, the ROE for Facebook is:28% = US$39b ÷ US$138b (Based on the trailing twelve months to June 2021).The ‘return’ is the yearly profit. So, this means that for every $1…
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