Sensex return on investment in FY19 slides to lowest in six years

The return on equity (RoE) for Sensex is now on a downward trajectory. Since 2013-14, the average RoE of the index has consistently come down from 16.4 per cent to 11.5 per cent at the end of the first half of 2018-19

RoE, the ratio of net profit to total equity capital, is an important metric to gauge a firm’s performance. Higher the RoE, the better it is as it denotes that the firm  is able to generate more bang (profits) for the buck (shareholder equity). 

The decline in Sensex is a worrying trend for investors.

Falling profitability of state-owned and corporate-focused banks