Difference Between Inverse P/E Ratio and Return on Equity

[lou]

lou - do some sums around RBD

price P is 216 cents while equity E is about 33 cents

earnings the same for your p/e and e/p and roe calculations

hope you get different answers

RBD P/E Ratio is 12.3 therefore;
12.3=216/E
12.3E=216
E=18cents (EPS)

Inverse P/E would be:
18/216=8.3%

Return on equity calculation would be:
EPS/Equity
18/33=55%


To me it seems that the ROE is useless when comparing which company to invest in because there is such a disconnect between the market value of equity and the book value of equity.

I am missing something here. What else can use the ROE percentage for? Do people use it when investing in the sharemarket (evaluation of shares)?