Return on Equity (ROE)= Sales Margin* Asset turnover* Gearing ratio

ROE= Profit/equity

Sales Margin= Profit/Sales

Asset turnover= Sales/Assets

Gearing Ratio= Assets/Equity

This formula is important from strategy point of view as higher ROE is possible in a low profit margin business by increasing the asset turnover and by taking debt to increase the capital employed.

This Question I need it to answer ---> "good very high level summary of the ratios in this DQ. Can you provide back to me the reason that each ratio is important in strategy work and let me know which one you feel in the most important?"