Lets say invested equity is 100. ROE = 10, Profit = 10.
Assuming all profit is re-invested in the company and ROE remains constant:
Next year, invested equity = 100 + 10, ROE = 10, Profit = 11
Thus, with all profit being re-invested, the maximum additional profit that the company can generate is equal to Profit * ROE
Hence:
Profit Growth % = ROE
To generate additional profit, the company needs additional capital, either debt or equity.
Realistically, it is never this easy.
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