Return on Equity and Return on Assets in Context of Sustainable Development

The concepts of sustainable development are getting to the awareness not only at the level of member states of United Nations, but there is also a need for application in companies. Sustainable development at micro level is followed through three pillars: economic, environmental and social. For long term development is crucial to sustain 'financial health" of company, which can be measured by financial performance and ability to pay liabilities. The object of the paper is examination of economic pillar of sustainable development through changes in profitability and indebtedness ratios. The aim of the paper is to analyse relations between return on equity and return on assets with emphasis on indebtedness in context of sustainable development. We concluded that change in debt ratio corresponds with the change in indebtedness determined by difference of indicators return on assets and return on equity.