Is the higher the company s ROE, the better?

Return on equity: The higher the index, the higher the return on the capital invested by the investor.

But beware: this indicator is compared with the interest rate on bank deposits.

Compare with the profit distribution ratio.

It should be analyzed in conjunction with the composition of net profit.

Return on total assets: The higher the rate, the more efficient the use of the company's assets.

The yield must be greater than the bank rate!

In fact, no matter what company, you can't just use indicators to analyze its good or bad.

For example, if the industry is a high-risk industry and the average return on equity is 45%, then the company's 30% is obviously inferior;

Combined with the economic environment, the economic development momentum in the past three years is still very strong, and 30% does not explain too much;

You also need to consider the company's capital structure to see if its financial leverage is high, for example, if his interest-bearing debt accounts for 80% of total assets, then the yield of 30% is not high.

Another important factor is sustainability. All historical data only represent the company's operation in the past, which can reflect the company's management level to a certain extent, but cannot indicate its future direction. If possible, it is better to get some ** indicators about the company, such as sustainable growth rate, budget cash flow statement, etc., and it is best to look at the economic review of the company or industry, right?

Hope it helps.

From an investment point of view, the general return on equity.

Comprehensive analysis of net profit, turnover speed, and financial leverage.

Return on equity (ROE) (rate of return on common stockholders' equity), return on equity is also known as return on equity return on equity return on equity return on equity return on equity return on equity.

It is the percentage of net profit to average shareholders' equity, which is the percentage ratio of the company's after-tax profit divided by its net assets, which reflects the level of income from shareholders' equity and is used to measure the efficiency of the company's use of its own capital. The higher the indicator value, the higher the return on investment. This indicator reflects the net income from own capital.

capacity. In general, an increase in debt leads to an increase in return on equity.

The assets of a business include two parts, one is the investment of shareholders, that is, the owner's equity.

It is the share capital, corporate provident fund and retained earnings invested by shareholders.

etc.), and the other part is the funds borrowed and temporarily occupied by the enterprise. The proper use of financial leverage by enterprises can improve the efficiency of the use of funds, and too much borrowed funds will increase the financial risk of the enterprise, but it can generally improve profits, and too little borrowed funds will reduce the efficiency of the use of funds. Return on equity is an important financial indicator to measure the efficiency of shareholders' use of funds.

Return on equity is an important indicator to measure the profitability of listed companies, reflecting the profitability of business owners, but some people slightly expand the role of return on equity when choosing investment products.

The official website shall prevail.

Return on equity.

It reflects the level of income from shareholders' equity and measures the efficiency of the company's use of its own funds. The higher the return on net assets, the stronger the ability of the enterprise's own funds to obtain income, the better the operating efficiency, and the higher the return on investment.

Return on equity = (net profit sales revenue.

Sales Revenue, Total Assets) * (Total Assets, Net Assets).

Generally speaking, a recommended ROE of 15% to 39% is most appropriate.

1. If the return on equity is greater than 39%, fraud or instability can be ignored

2. The return on net assets is less than 15% or below, and the company's management does not have the actual control ability, indicating that it is not responsible for shareholders' funds and should be carefully considered.

Appropriate use of financial leverage.

It can improve the efficiency of the use of funds, but the profit margins of enterprises in different industries are different, and the return on equity is also different. If the return on equity is on the rise, it means that the company is in a stage of rapid growth, but it is also necessary to consider how long the space and cycle of rapid growth can be maintained, which determines whether the company will be in a stable growth stage. or the capital chain is broken due to the leverage of financing.

Extended Materials. 1.Return on equity is also known as equity.

Return Return on Net Equity Return on Equity Return on Equity Return on Net Assets is the percentage of net profit to average shareholders and the percentage of a company's profit after tax divided by its net assets. This indicator reflects the level of earnings on shareholders' equity and is used to measure the efficiency of a company's use of its own funds. The higher the index value, the higher the return on investment.

This indicator reflects the net income from own capital.

capacity. 2.In general, an increase in liabilities leads to an increase in return on equity. The assets of the enterprise include two parts, one is the investment of the shareholders, that is, the owner's equity.

It is the share capital, corporate provident fund and retained earnings invested by shareholders.

The second is the funds borrowed and temporarily occupied by the enterprise. Enterprise. Rational use of financial leverage can improve the efficiency of the use of funds.

Borrowing too much money increases the financial risk of a business, but it can generally improve profits. Borrowing too little money will reduce the efficiency of the use of funds. Return on equity is an important financial indicator to measure the efficiency of shareholders' capital use.

[Capital profit rate = net profit capital total amount zhi] capital dao

The total amount of capital refers to the total capital registered by various investment entities of the enterprise. So he is the percentage of profit to registered capital.

Return on equity = net profit net assets].

Note that net assets are shareholders' equity, and shareholders' equity will increase accordingly after profit, while registered capital will not increase with profit. That's the difference between the two.

Return on equity is the rate of return on owner's equity. Net profit margin is net profit.

The name is different, of course it's different...

Summary. Hello, glad for your question. Return on equity is a measure of the efficiency of a company's use of its own capital.

The higher the return on equity, the stronger the ability of the enterprise's own capital to obtain income, the better the operating efficiency, and the higher the return on investment.

Return on equity = (net profit sales revenue) * (sales revenue total assets) * (total assets net assets).

Generally speaking, ROE recommendations of 15% to 39% are most appropriate.

How normal is the return on equity?

Hello, glad for your question. Return on equity is a measure of the efficiency of a company's use of its own capital. The higher the return on net assets, the stronger the ability of the company's own capital to obtain income, and the better the operating efficiency, the higher the return on investment.

Return on equity = (net profit sales revenue) * (sales revenue total assets) * (total regret assets net assets) Generally speaking, the ROE recommendation is 15% 39% is the most appropriate.

There are not many such companies.

There are many such companies in the A-share market.

There are only more than 1,000 stock pickers who select more than 2%.

You are mistaken, there are only more than 3,000 A-share listed companies.

Generally speaking, the higher the ROE, the better, and the minimum cannot be lower than the bank interest rate.

Return on equity (ROE) is an important indicator to measure the profitability of a company. ROE refers to the ratio between a company's profits and net assets, reflecting a company's ability to capitalize on its return on capital. The following analyzes the significance and application of ROE from the perspectives of enterprises and investors.

From the perspective of enterprises: return on net assets is one of the important indicators to measure the operating efficiency of enterprises. The higher the ROE, the stronger the company's ability to use the return on capital, and the better the operating efficiency.

Businesses can increase their return on equity by raising profits or lowering their net assets, thus achieving optimal use of capital. At the same time, high net assets can also improve the market reputation and competitiveness of enterprises, and attract more investors and financing institutions.

From an Investor Perspective:

Return on equity is one of the key metrics that investors need to consider when choosing where to invest. Investors can evaluate the operating efficiency of different companies through their return on equity compared to Lixin, and choose companies with greater potential for investment. In addition, investors can also measure the risk level of a business through return on equity.

In general, a high ROE means that the business is less risky and investors can invest with more confidence.

It should be noted that ROE is not the only indicator to measure the comprehensive strength of a company, and investors also need to consider other factors when making investment decisions, such as market prospects, competitive environment, financial status, operation and management, etc. In addition, there are certain limitations to the return on net assets, such as not reflecting the company's debt, capital structure, asset-liability ratio and other factors. Therefore, when using ROE for investment decisions, it is necessary to conduct a comprehensive analysis in combination with other indicators.

To sum up, ROE is one of the important indicators to measure the profitability of an enterprise, which can not only reflect the operating efficiency of the enterprise, but also provide investors with a reference for decision-making. Enterprises and investors need to fully consider the limitations of ROE in the actual application process, and conduct a comprehensive analysis in combination with other factors.