Roe calculation + dividend

ROE (return on equity) is the return available for distribution to equity shareholders.

ROE  = Return available to Equity shareholders/Equity shareholders fund

The company pays dividend to equity shareholders out of these returns only. So if a company has paid a certain percentage of income as dividend, then the return on equity would be as:

ROE  = Divident + DDT + Retained earnings

PLease could you help me on calculating the  ROE final formula:

ROE = (PAT + divident% of PAT ) / ( total equity )      ... would be wrong !!

I have the these  values from the company quater results ...

 # PAT    - 65 

#cash profit  - 83

# total equity - 603

# Total Divident on equity shares ( in rs)  - 1  RS

# total  divident  percentage - 10%

In the given case ROE would be 65/603 = .1078 or 10.78%

Thanks ..so for confirmation .

the divident paid by the copmpany  does not have a say in the ROE .

ROE = PAT /total equity 

Dividend paid is out of the earnings of the company...it is already included in ROE.

And the formula PAT/Equity is correct only when there are no preference shares.

Thanks Dev , got it .. but where is the dividend expense shown in the Balance statement ..?

Does it come under current liability ?

Yes...Dividend payable comes under current liability.

Thanks Dev , soo much for your time and valuable info on ROE  ..