The ratio of shareholders equity is more or less good

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

Return on equity shows the return on a shareholder's investment within the company. A shareholder equity of 300 million creates 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. It is important to compare the return on equity to the industry-wide average to get a meaningful ratio that is more realistic about 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profits of the statutory surplus and arbitrary surplus reserve, where the statutory surplus reserve will not be withdrawn when the cumulative withdrawal amount reaches 50% of the company's registered assets.

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 Statutory public welfare fund withdrawn at 5%-10% of after-tax profits.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

The sum of the shareholder's equity ratio and the asset-liability ratio is one, and the asset-liability ratio can be considered as the best. The asset-liability ratio stipulates that the company law stipulates that it should not exceed 40%, that is, the shareholders' equity ratio is 60%.

The shareholders' equity ratio (also known as the equity ratio or net assets ratio) is the ratio of shareholders' equity to total assets, which reflects how much of a business's assets are invested by the owners. 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. An excessively large equity ratio means that companies are not actively using financial leverage to expand their operations.

The shareholders' equity ratio is the ratio of shareholders' equity to total assets. 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. The shareholder's equity ratio is the ratio of shareholders' equity to total molded assets. The shareholder's equity ratio is composed of a small or slow part

1. The surplus reserve is divided into statutory surplus reserve and arbitrary surplus reserve. The statutory surplus reserve is mandatory to withdraw 10% of the company's after-tax profits. The purpose is to deal with business risks. When the accumulated amount of statutory surplus reserve has reached 50% of the registered capital, it can no longer be withdrawn.

2. Statutory public welfare shall be withdrawn from 5% to 10% of after-tax profits. It is used for the expenditure of the company's welfare facilities.

3. Undistributed profit refers to the profit or profit to be distributed by the company for distribution in subsequent years.

Legal basisArticle 26 of the Accounting Standards for Business Enterprises - Basic Standards (2014 Revision).

Owner's equity refers to the residual equity enjoyed by the owner after deducting liabilities from the assets of the enterprise. The owner's equity of a company is also known as the shareholders' equity group.

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.