
	Where results make sense

Topic: Return On Equity

Related Topics

Return On Capital

Financial ratio

PE ratio

Return on assets

Return on investment

Rate of return on investment

Rate of profit

Income statement

Net present value

Fundamental analysis

Financial statements

Siren, Burnett County, Wisconsin

Company

Chronogram

Israeli Military Industries

In the News (Thu 31 Dec 09)

Northern Trust

Marvin Harrison

Peter Chernin

Gary Locke

Match Play

Penelope Cruz

Mickey Rourke

AR Rahman

Danny Boyle

Hugh Jackman

	Fool.com: A Definition [Return on Equity]
		By perceiving return on equity as a composite that represents the executive team's ability to balance these three pillars of corporate management, investors can not only get an excellent sense of whether they will receive a decent return on equity but also assess management's ability to get the job done.
		Return on equity is calculated by taking a year's worth of earnings and dividing them by the average shareholder's equity for that year.
		Shareholder's equity can be found on the balance sheet and is simply the difference between the total assets and total liabilities, as it is assumed that assets without corresponding liabilities are the direct creation of the shareholder's capital that got the business started in the first place.
	www.fool.com /School/ReturnOnEquity/ReturnOnEquityPartOneDefinition.htm (715 words)

	"Return on equity" Definition (Site not responding. Last check: 2007-11-05)
		For instance, if the adjusted profit of a company is Ј1m and Equity is Ј10m, the Return on Equity is 10%.Adjusted profit is the profit of the company adjusted to exclude the impact of non-recurring exceptional gains, losses, income and charges.
		Equity is the total of ordinary share capital plus reserves, and both figures appear in the company"s Balance Sheet.
		In calculating Return on Equity, you can use the Equity at the end of the year or the average between the opening and closing equity.
	www.level2.ru /dictionary/r/return_on_equity.html (337 words)

	How To Pick Stocks Using Return On Equity
		The sustainable growth rate is return on equity times the percentage of earnings that is retained (as opposed to paid out as a dividend).
		This establishes the mathematical fact that a company with a higher sustained Return on Equity can be expected to grow earnings at a higher rate than a company with a lower return on equity, assuming both companies pay out the same percentage of earnings as a dividend.
		A high return on equity is therefore a very good thing, however, we must be cautious not to pay too high of a P/E ratio.
	investorsfriend.com /return_on_equity1.htm (1065 words)

	Return on Capital
		This means that the return on equity for Apple was 40% while for Zebra it was 30%.
		One way to think about them is that return on equity indicates how well a company is doing with the money it has now, whereas return on capital indicates how well it will do with further capital.
		If you compare return on equity vis à vis return on capital for a company like General Motors with that of a company like Gillette, you’ll see one of the reasons why Buffett includes the latter company in his portfolio and not the former.
	www.sherlockinvesting.com /articles/capital.htm (810 words)

	Return on Equity Increased Glossary Definition: Investor - MSN Money
		A company’s return on equity usually doesn’t surge overnight, so the increase of at least 20% signaled by this alert means this good news has been brewing for a while.
		To be safe, besides comparing return on equity, check the more comprehensive ratio called "return on investment," which considers total debt and equity invested in the company.
		Comparing return on equity across an industry will still work for cyclical companies as long as they are at approximately the same point in the industry cycle.
	moneycentral.msn.com /investor/alerts/glossary.asp?TermID=49 (456 words)

	"Return on equity (ROE)" Definition
		Investors use R.O.E. as a measure of how a company is using its money.
		R.O.E. may be decomposed into return on assets (R.O.A.) multiplied by financial leverage (total assets/total equity).
		may be decomposed into return on assets (r.o.a.) multiplied by financial leverage (total assets/total equity).
	www.level2.ru /dictionary/r/return_on_equity_roe.html (165 words)

	Fool.com: Equity-Based Valuations [Valuation]
		Traditionally, investors who rely on buying companies with a substantial amount of equity to back up their value are a paranoid lot who are looking to be able to collect something in liquidation.
		Return on equity is a measure of how much in earnings a company generates in four quarters compared to its shareholder's equity.
		In fact, high ROE companies are so attractive to some investors that they will take the ROE and average it with the expected earnings growth in order to figure out a fair multiple.
	www.fool.com /School/EquityBasedValuations.htm (1345 words)

	Return on Equity (Site not responding. Last check: 2007-11-05)
		Just as a 10% return on a business is, all other things being equal, better than a 5% return, so too with corporate rates of returns on equity.
		Also, a higher return on equity means that surplus funds can be invested to improve business operations without the owners of the business (stockholders) having to invest more capital.
		A comparison of the rates of return on equity and capital for these three companies is significant and the reader can make their own calculations.
	www.buffettsecrets.com /return-on-equity.htm (633 words)

	Value Investing Encyclopedia: Return on Equity
		Return on Equity (ROE) is equal to after – tax income divided by book value.
		It represents the return on owner’s equity, and is therefore comparable to the accounting measures return on partner’s equity and return on owner’s equity used in the financial analysis of partnerships and sole proprietorships respectively.
		Although, in the long – run return on equity is what matters, ROE is often a very poor predictor of future profitability among businesses with different debt loads.
	www.gannononinvesting.com /glossary/2005/12/return_on_equity.html (481 words)

	Return on equity - Wikipedia, the free encyclopedia
		Return on Equity (ROE, Return on average common equity) measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners.
		ROE is viewed as one of the most important financial ratios.
		ROE is equal to a fiscal year's net income (after preferred stock dividends but before common stock dividends) divided by total equity (excluding preferred shares), expressed as a percentage.
	en.wikipedia.org /wiki/Return_on_equity (640 words)

	Return on Equity
		ROE is calculated by taking a year's worth of earnings and dividing them by the average shareholder's equity for that year.
		Shareholder’s equity can be found on the balance sheet and is simply the difference between the total assets and total liabilities.
		Looking at asset management in the context of the total ROE allows the investor to balance a company's asset management ability with its profit margins and the financial leverage employed in order to discern whether the actual business is great or simply mediocre.
	www.smallcapreview.com /return_on_equity.htm (697 words)

	Document
		That ROE has soared even as inflation has remained low is especially impressive, because inflation itself is one of the things that has boosted ROE in the past.
		He figured that return on equity can be arrived at by multiplying profit margin (profits as a percent of sales) and turnover (sales as a percent of assets, or, to put it another way, the rate at which a company's resources are turned into sales).
		Shareholders' equity, largely as a result, has fallen from $42.8 billion in 1990 to $22.4 billion in 1995, making it a cinch for IBM to sport a smart return of 19%.
	www.csun.edu /~hfact004/return-on-equity.htm (2309 words)

	RETURN ON EQUITY CALCULATION (via CobWeb/3.1 planetlab2.cs.virginia.edu) (Site not responding. Last check: 2007-11-05)
		The capital for the investment comes from equity and debt, and the amount of the debt divided by the total capital is the leverage factor.
		The amount of the equity investment is equal to the total capital times one minus the leverage and therefore the yield will be higher by one over this difference.
		Where E and Y are the equity balance and yield rate, D and Yd are the loan balance and interest rate, and C and Yc are the capital balance and yield rate.
	www.interet.com.cob-web.org:8888 /article-returneqcalc.htm (429 words)

	USATODAY.com - Rules of the ratio game (Site not responding. Last check: 2007-11-05)
		Return on equity (ROE) is measured by dividing a company's net income (from the income statement) by its shareholders' common stock equity (from the balance sheet).
		Return on invested capital goes a step beyond ROE to measure how much net income the company is generating based on all the capital at its disposal, including both debt and equity.
		Return on invested capital is calculated by dividing a company's net income (from the income statement) by the sum of a company's shareholders' equity (from the balance sheet) plus long-term debt (from the balance sheet).
	www.usatoday.com /money/perfi/columnist/krantz/2005-08-03-ratio_x.htm (798 words)

	Invest FAQ: Analysis: Return on Equity versus Return on Capital
		This article analyzes the question of whether return on equity (ROE) or return on capital (ROC) is the better guide to performance of an investment.
		For example, in one annual report he wrote,"To evaluate [economic performance], we must know how much total capital—debt and equity—was needed to produce these earnings." When he mentions return on equity, generally it is with the proviso that debt is minimal.
		If you compare return on equity against return on capital for a company like General Motors with that of a company like Gillette, you'll see one of the reasons why Buffett includes the latter company in his portfolio and not the former.
	www.invest-faq.com /articles/analy-roe-vs-roc.html (883 words)

	What is the Return on Equity?
		Two of the most common are the "Return on Equity" (ROE) and "Return on Capital Employed" (ROCE).
		Here the total pre-tax return (profit before tax plus interest) is measured against the total capital employed (equity plus debt).
		Hence it is preferable to use the average equity (or capital) employed by adding the year-end and year-beginning equity and dividing it by two for computing the ROE.
	www.valuenotes.com /et97/feb23.asp?ArtCd=11&pf=true (1159 words)

	Return on Equity - What a Non-Traditional Approach Can Reveal
		That equity is not what you invested, but rather the difference between what the property is worth and what you still owe in mortgage financing.
		So, if you look at the equity after one year (or two or three), you’ll be taking into account the growth or decline in the property’s value as well as the amortization of your mortgage.
		ROE is a simple ratio, so if the equity grows faster than the cash flow, then the Return on Equity will decline over time.
	www.realdata.com /ls/equity.shtml (737 words)

	Return on Equity
		Dividing these profits by the equity is called return on equity, or ROE for short.
		The criterion that is relevant for us is "a businesses earning good returns on equity while employing little or no debt." Statements like this are scattered throughout his writings showing that the level of a company's ROE has been, and continues to be, a corner stone for Buffett's investment decisions.
		Crunching the numbers another way, the average annual return for the ten companies with the lowest ROE was 5.6% while that for the 10 companies with the highest ROE was 35.8%.
	www.sherlockinvesting.com /articles/pv200204.htm (1020 words)

	Return on equity revealing (Site not responding. Last check: 2007-11-05)
		The shareholders' equity figure, which comes from the balance sheet, is a firm's assets less its liabilities.
		So ROE is, in effect, a speed limit on a firm's growth rate, and that's why money managers rely on it to gauge growth potential.
		Because ROE is net income divided by the equity figure, the higher-debt firm shows the highest return on equity.
	www.sfgate.com /cgi-bin/article.cgi?file=/c/a/2002/12/01/BU20045.DTL (762 words)

	Return on Equity (ROE) (via CobWeb/3.1 planetlab2.cs.virginia.edu) (Site not responding. Last check: 2007-11-05)
		A business that has a high return on equity is more likely to be one that is capable of generating cash internally.
		Return on equity is particularly important because it can help you cut through the garbage spieled out by most CEO’s in their annual reports about, “achieving record earnings”.
		The return on equity figure takes into account the retained earnings from previous years, and tells investors how effectively their capital is being reinvested.
	beginnersinvest.about.com.cob-web.org:8888 /cs/investinglessons/l/blreturnequity.htm (882 words)

	Return On Equity
		ROE is an accounting valuation method similar to Return on Investment (ROI).
		Return on Equity (ROE) is one measure of how efficiently a company uses its assets to produce earnings.
		On top of this, ROE is sensitive to leverage: because it assumes that proceeds from debt financing can be invested at a return greater than the borrowing rate, the ROE will increase with greater amounts of leverage.
	www.12manage.com /methods_roe.html (236 words)

	Return On Equity - ROE (Site not responding. Last check: 2007-11-05)
		The ROE is useful for comparing the profitability of a company to that of other firms in the same industry.
		Return on equity may also be calculated by dividing net income by average shareholders' equity.
		Investors may also calculate the change in ROE for a period by first using the shareholders' equity figure from the beginning of a period as a denominator to determine the beginning ROE.
	www.investopedia.com /terms/r/returnonequity.asp (349 words)

	Fool.com: Selecting Stocks Using ROE [Commentary] April 28, 2004
		Breaking apart return on equity can determine that a company's operations are improving before the market notices.
		A consistently low ROE is a sign that the company's management isn't effectively deploying the resources at its command.
		The return on equity calculation, as simple as it appears, is actually a combination of several critical components relating to profit margins, asset turnover, debt, and debt servicing.
	www.fool.com /news/commentary/2004/commentary040428bm.htm (1341 words)

	Luther King Capital Management - Equity Investment Philosophy
		Our equity philosophy is based upon the belief that companies which generate a consistently high return on shareholders' equity will provide above average rates of return to their shareholders over a long period of time.
		Generally speaking, return on equity is an indicator of the company's competitive position in the industry.
		As is true with the approach described earlier, cash flow, return on equity and financial leverage are important variables in the analysis.
	www.lkcm.com /html/equity_investment_philosophy.html (548 words)

	Federated Investors tops in return on equity
		Besides revenue and profit growth, return on equity is another standard measure of a company's performance.
		The figure, which is determined by dividing net income by stockholder equity (which represents retained earnings and proceeds from initial and secondary stock sales), can help shareholders tell how effectively management is using their money.
		Federated's return on equity was 115 percent last year, tops among the roughly 80 local public companies surveyed.
	www.post-gazette.com /businessnews/20000409equity.asp (359 words)

	Return on Equity (Site not responding. Last check: 2007-11-05)
		The ratio of net income (from the income statement) to net worth or stockholders' equity (from the balance sheet) shows you what you've earned on your investment in the business during the accounting period.
		A high return on equity may be a result of a high return on assets, extensive use of debt financing, or a combination of the two.
		In analyzing both return on equity and return on assets, don't forget to consider the effects of inflation on the book value of the assets.
	www.bizfilings.com /toolkit/P06_7295.htm (301 words)

	Hussman Funds - Weekly Market Comment
		Return on equity is defined as the ratio of earnings to book value.
		So ROE is effectively driven by profit margins, “asset turnover” or the amount of revenues that can be generated by a given level of assets, and leverage — the number of dollars in assets a company can control with a dollar of shareholder equity.
		Today's high ROE essentially reflects 1) unusually high (and mean reverting) profit margins, 2) various efficiencies that have allowed companies to generate more revenues for a dollar of assets, and finally, 3) unusually high corporate leverage.
	www.hussmanfunds.com /wmc/wmc051017.htm (1623 words)

	Return on common equity Canadian Shareowner - Find Articles (Site not responding. Last check: 2007-11-05)
		A third ratio, Return on Common Equity (ROCE), reflects the combined effects of OPM and the Debt Ratio on past profitability and serves as a starting point for judging the potential for future growth in earnings per share (EPS).
		When calculating the amount of money that common shareowners had invested in the business during the year, it is appropriate to use an average of the common equity during that year.
		Leverage (Assets/Common Equity) indicates the vulnerability of a company's earnings to significant increases in interest rates as well as the company's ability to borrow additional funds.
	www.findarticles.com /p/articles/mi_qa3642/is_199507/ai_n8730819 (809 words)

Try your search on: Qwika (all wikis)