ROE (Net Income) versus ROE-CI (Comprehensive Income): A Multidimensional Analysis of a Time-Honoured Performance Metric

Marzena Remlein; Małgorzata Rówińska-Kráľ; Radka MacGregor Pelikánová

doi:10.2478/ceej-2026-0011

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ROE (Net Income) versus ROE-CI (Comprehensive Income): A Multidimensional Analysis of a Time-Honoured Performance Metric

Central European Economic Journal

Volume 13 (2026): Issue 60 (January 2026)

By: Marzena Remlein , Małgorzata Rówińska-Kráľ and Radka MacGregor Pelikánová

Open Access

|Jun 2026

Abstract

Business performance is key for all stakeholders. Return on equity (ROE) measures how effectively resources generate profits and indicates both the profitability and managerial efficiency. The traditional ROE, based only on net income, is sensitive to accounting policy (AP) choices and valuation models under IAS/IFRS. Since valuation effects may be recognised either in profit or loss or in other comprehensive income (OCI), ROE can be distorted. This problem has intensified with the introduction of IFRS 9 (2018) and during recent crises, when incentives for earnings management increased. The purpose of this study is to address two research questions: Does the traditional ROE adequately reflect the financial performance efficiency (Q1), and does the use of traditional ROE versus return on equity-comprehensive income (ROE-CI) lead to significant differences in the assessment (Q2)? The methodological triad juxtaposes academic comparative analysis, AI Chat GPT suggestions, and an empirical case study regarding 10 banks listed on the Warsaw Stock Exchange and their financial statements for 2017–2024, comparing ROE, ROE-CI, and the AP ratio to assess the impact of OCI on performance. The academic comparison and AI suggestions are not conclusive; the case study shows that banks increasingly use OCI to recognise valuation effects, creating discrepancies between ROE and ROE-CI. Pioneeringly, it is suggested that the proposed AP ratio (OCI/P) detects distortions and indicates when ROE-CI should be applied to reflect profitability.

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Articles in this issue

DOI: https://doi.org/10.2478/ceej-2026-0011 | Journal eISSN: 2543-6821 | Journal ISSN: 2544-9001

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Language: English

Page range: 192 - 207

Submitted on: Dec 20, 2025

Accepted on: Apr 23, 2026

Published on: Jun 20, 2026

Published by: Faculty of Economic Sciences, University of Warsaw

In partnership with: Paradigm Publishing Services

Publication frequency: 1 issue per year

Keywords:

ROE,

return on capital,

comprehensive income,

net income

Related subjects:

Business and economics,

Political economics,

Economic theory, systems and structures,

Microeconomics,

Macroeconomics,

Economic policy

© 2026 Marzena Remlein, Małgorzata Rówińska-Kráľ, Radka MacGregor Pelikánová, published by Faculty of Economic Sciences, University of Warsaw
This work is licensed under the Creative Commons Attribution 4.0 License.

Volume 13 (2026): Issue 60 (January 2026)