Is it better to have a large or small shareholder equity ratio?

Shareholders' equity. The size of the ratio depends on the company's operating situation and the type of company, if the company is very good, stable in all aspects, strong momentum, and the proportion of shareholders' equity is small, it is better. This shows that when the company's shareholders run the company, they can use more resources and will play better and make better profits, but vice versa.

The shareholders' equity ratio is an important financial indicator.

If the equity ratio is too small, it indicates that the company is over-indebted, which is easy to weaken the company's ability to resist external shocks. An excessively large equity ratio means that companies are not actively using financial leverage to expand their operations.

By grasping the analysis essentials and application rules of the shareholder's equity ratio, you can better analyze the best of the best.

This depends on the substance of the company.

If the company is operating very well, there will be no major changes in the next few years, and the company's finances and profits are very good, it is better to have a small proportion of shareholders' equity. Because the company's shareholders apply more resources to the company's operation, they will play and earn better.

If the company is doing well, or if it is deteriorating, it should not be operated on this basis. There are already difficulties in its own operation, and if it increases the "burden" of repaying and repaying its rights, it is not a good thing for the long-term development of the company. In other words, it can only solve the immediate troubles, and the troubles will become more and more in the future.

Again, it depends on what type of company the company belongs to. For example, the equity ratio of banks is very small, because they need to borrow and lend money to operate, and their own equity is not very important. That's what I meant at the beginning, to sum it up.

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1.Return on shareholders' equity: For example, the return on shareholders' equity has maintained a level of 25% or greater than 25% in the past 10 years, and there is no additional issuance, it can be affirmed that the management has done a good job, and the management has effectively used the retained earnings, and the increase in retained earnings has also raised the growth of shareholders' equity, and the growth of shareholders' equity will eventually improve the market**.

2.Shareholder equity growth rate: e.g. return on shareholders' equity minus dividend payout ratio, e.g

The return on shareholders' equity is 25% and the dividend payout ratio is 20% of the return on shareholders' equity, then the shareholders' equity growth rate is: 20%. 3.

Debt-to-equity ratio: the ratio of total debt to shareholders' equity (net assets), for example, if a company has a debt of 30 million in the long run, shareholders' equity is 100 million, and the debt-to-equity ratio is:

However, some companies will borrow to acquire some excellent companies because of their strong net cash flow from their operations.

Hope it helps!

The minimum return on equity for a company is 15%.

Return on equity.

The company showed the income obtained by the shareholders in the company's investment in the company. 300 million shareholders' equity.

It is very good to generate a net income of 100 million per year (1 3 = or 30%). But a net income of 100 million per year is pitiful for a shareholder equity of 3 billion (1 30 = or 3%).

In general, the higher the return on equity, the better. A return on equity greater than 15% is good, while a return on equity greater than 20% can be considered excellent. Put the return on equity with the industry-wide average.

It's important to make comparisons because it gives you a meaningful understanding of the company.

Shareholders' equity consists of five main parts.

1. The ** principal calculated according to the face value.

2. Capital reserve such as issuance premium, acceptance of donated assets, property revaluation and appreciation, etc.

3. Compulsory withdrawal of 10% of the company's after-tax profits of the statutory surplus and arbitrary surplus reserve, here the statutory surplus reserve.

When the cumulative withdrawal amount reaches 50% of the company's registered assets, it will not be withdrawn.

4. Statutory public welfare fund withdrawn at 5%-10% of after-tax profits.

5. The profits to be distributed by the listed company in the next year or later.

The above content refers to Encyclopedia - Shareholder Equity Ratio.

According to the principle of 40% of the asset-liability ratio, it is recommended that according to the different conditions of the company, the proportion of shareholders' equity can be controlled in a stable range between 50-70. Legal basis:

The Company Law of the People's Republic of China stipulates that the shareholders of the company enjoy the rights of the owner's assets, major decision-making and selection of managers according to the amount of capital invested in the company. Shareholders' equity is the equity enjoyed by shareholders based on the part of the property they have invested in the company. Shareholders' equity is an important financial indicator that reflects the company's own capital.

When the total assets are less than the total liabilities, the company falls into insolvency, and the company's shareholders' equity disappears. In the event of liquidation, the shareholders will receive nothing. Conversely, the larger the amount of shareholder equity, the stronger the company.

The applicable form of shareholders' equity in practical application is the shareholder's equity ratio, also known as the net assets ratio, which is the ratio of shareholders' equity to total assets, which reflects how much of the enterprise's assets are invested by the owners. If the equity ratio is too small, it indicates that the company is over-indebted, which is easy to weaken the company's ability to resist external shocks. An excessively large equity ratio means that companies are not actively using financial leverage to expand their operations.

The ratio of shareholders' equity refers to the ratio of shareholders' equity to total assets, which reflects how much of the company's assets are invested by the owners. So how much is the appropriate proportion of shareholders' equity, let's briefly analyze it as follows.

First of all, the size and quality of the shareholder's equity ratio depend on the company's operation and company type. If the company is operating very well, stable in all aspects, strong operating momentum, and a small proportion of shareholders' equity, it is better. This shows that when the company's shareholders run the company, they will be better able to use more resources, and not vice versa.

Secondly, the equity ratio is a very important financial indicator, if the equity ratio is too small, it indicates that the enterprise is over-indebted, and it is easy to weaken the company's ability to resist external shocks, and the equity ratio is too large, which means that the enterprise has not actively used financial leverage to expand the scale of operation.

Therefore, the proportion of shareholders' equity is appropriate, it needs to be determined by the overall situation of the company, according to the principle of 40% of the debt ratio of the company, it is recommended that according to the different conditions of the company, the proportion of shareholders' equity can be controlled in a stable range between 50-70.

The ratio of shareholders' equity should be moderate. If the equity ratio is too small, it indicates that the company is over-indebted, which is easy to weaken the company's ability to resist external shocks and the equity ratio is too large. This means that companies are not actively using financial leverage to scale their operations.

Legal basis] Article 72 of the Company Spring Travel Law When the People's Court transfers the equity of shareholders in accordance with the compulsory enforcement procedures prescribed by law, the company and all shareholders shall be notified that other shareholders have the right of first refusal under the same conditions. If other shareholders do not exercise the right of pre-emption within 20 days from the date of notice from the people's court, they shall be deemed to have waived the right of pre-emption.