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Showing posts with label ROE in action. Show all posts
Showing posts with label ROE in action. Show all posts
Saturday 21 September 2019

The Possibility of Reinvesting More Capital in companies with High Returns on Capital

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Bear in mind that the potential for companies with high returns on capital to reinvest a lot of capital are limited, since they tend not...
Tuesday 11 April 2017

Return on Capital Employed

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For example: Capital employed $5 million Annual profit after tax $1 million Return on capital employed 20% The profit may be expresse...
Monday 9 January 2017

The importance of high ROE when selecting your stocks for the long term (Warren Buffett)

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In his newsletter to Berkshire Hathaway's shareholders in 1987, Warren Buffett wrote a brilliant piece on his focus on return of equity...
Saturday 17 December 2016

ROE as a proxy for Competitive Advantage

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The DuPont formula ROE= (Net Profit/ Sales) X (Sales/ Assets) X (Assets/ Equity) And we are left with:    ROE  = Net Profit/ Equity ...
Monday 13 January 2014

Return on Equity (ROE) - the financial metric that investors should use to judge a company's annual performance

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Buffett considers earning per share a smoke screen. Most companies will retain a portion of their previous year's earnings as a way to...
Saturday 25 February 2012

Warren Buffett favours companies that increase their ROE or which have consistent levels of ROE.

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INVESTMENT DANGERS There can be dangers in averaging returns over a long period. A company might start with high rates which then fall away...

Warren Buffett's secret - THE COMPOUNDING FACTOR

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EXPLANATION This may be old hat to some readers but it is worth remembering how compounding is one of the keys to Warren Buffett’s investme...
Tuesday 29 March 2011

ROA And ROE Give Clear Picture Of Corporate Health

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ROA And ROE Give Clear Picture Of Corporate Health by Ben McClure   With all the ratios that investors toss around, it's easy to get co...
Tuesday 26 October 2010

Warren Buffett believes that the return that a company gets on its equity is one of the most important factors in making successful stock investments.

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Warren Buffett believes that the return that a company gets on its equity is one of the most important factors in making successful stock ...
Monday 26 July 2010

Why Return on Equity Is Important

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Historically, one of the best ways to grow wealthy has been to own businesses that generate high returns on equity with little or no debt, ...

Return On Equity (ROE): Find Explosive Momentum Stocks With This Financial Ratio

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Return On Equity (ROE): Find Explosive Momentum Stocks With This Financial Ratio June 4th, 2009  Green Mountain Coffee Roasters produced a r...
Friday 24 April 2009

ROE in Action

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ROE in Action Using Value Line as the source, IBM's ROE was a paltry 5% in the 1991-1993 timeframe. At that point, now-retired chairman ...