Search results “Return on common equity analysis”
Return On Equity explained
What is Return On Equity? Return On Equity or ROE is a financial ratio that can help you analyze the performance of a company or business unit from the perspective of the shareholder, and compare the financial performance to others. This video takes you through the Return On Equity formula, shows you how to calculate ROE, how to interpret ROE, and gives suggestions on how to improve Return On Equity. Return On Equity links together information from two of the three main financial statements, by taking the bottom line of net profit from the income statement and the equity or shareholder capital amount out of the right hand side of the balance sheet. ROE or Return On Equity is defined as Net Income divided by Equity. In other words, the net profit that a company has generated during a year, divided by the book value of the shareholder capital that a company owes on the balance sheet date. ROE is an important indicator of attractiveness of a business to shareholders. Can the company generate a good return on the equity that investors have invested in it? Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!
ROE (Return On Equity) Explained
What ROE means when evaluating a business and how to calculate ROE?
Views: 47132 KCLau Money
Return on Equity (ROE) - Explained in Hindi
Return on Equity is explained in hindi. ROE is a profitability financial ratio that gives the return on investment for shareholders. In next video we will learn about ROCE i.e. Return on Capital Employed that gives overall returns on the capital in the business. Related Videos: Financial Ratios & Analysis: https://youtu.be/CZscpOND3Vs Profitability Ratios: https://youtu.be/pHgiuO2ZYoU Return on Investment (ROI): https://youtu.be/ij7y5e2MVG4 ROCE (Return on Capital Employed): https://youtu.be/FjWuma0U2x0 Return on Assets: https://youtu.be/7z9jDKNub6U रिटर्न ऑन इक्विटी को इस वीडियो में हिंदी में एक्सप्लेन किया गया है। ROE एक प्रोफिटेबिलिटी फाइनेंसियल रेश्यो है जो शेयर होल्डर्स के लिए निवेश पर रिटर्न देता है। अगले वीडियो में हम ROCE यानिकि रिटर्न ऑन कैपिटल एम्प्लॉयड के बारे में जानेंगे जो की बिज़नेस के कैपिटल पर ओवरऑल रिटर्न देता है। Share this Video: https://youtu.be/K-OhdUGqdzc Subscribe To Our Channel and Get More Property, Real Estate and Finance Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g If you want to become an Expert Real Estate investor, please visit our website https://assetyogi.com now and Subscribe to our newsletter. In this video, we have explained: What is a return on equity or ROE? How many types of ROE is there? How to calculate returns using return on equity formula? What are the limitations of return on equity calculation? What is the common equity? What is the meaning of preferred equity? Which profitability ratio is used to calculate the return on investment for shareholders? How to calculate the return on common equity? What happens when the company increases debt & decreases the equity portion? In the video, you will also see how you can check the financials of different companies online & calculate the return on equity. Make sure to Like and Share this video. Other Great Resources AssetYogi – http://assetyogi.com/ Follow Us: Instagram - http://instagram.com/assetyogi Google Plus – https://plus.google.com/+assetyogi-ay Facebook – https://www.facebook.com/assetyogi Linkedin - http://www.linkedin.com/company/asset-yogi Twitter - http://twitter.com/assetyogi Pinterest - http://pinterest.com/assetyogi/ Hope you liked this video in Hindi on “Return on Equity (ROE)”.
Views: 19023 Asset Yogi
Return on Common Equity CFA exam ROCE ch 5 p 6
financial statement analysis, common-size financial statements, acid test ratio, account receivable turnover, inventory turnover, asset turnover, gross profit, debt ratio, equity ratio, times interest earned, dividend yield, pe ratio, CFA exam, CPA exam
Rate of Return on Common Stockholder's Equity ROE
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How to calculate Return on Equity
Here’s an important question to ask about any investment you’re making: “Is this the best use of my money?” Hi everybody, Ron Phillips here with RPC Invest. https://www.rpcinvest.com/ Like us on Facebook: https://www.facebook.com/WealthAcceleratorSystem/ Blog Post: https://www.rpcinvest.com/blog Don’t forget to Comment and Subscribe if you liked this video! Thanks for checking out this video! A Question i get asked all the time is…. Why should i invest into Real Estate. http://www.ron-phillips.com/3xmarket/ The answer that your will video out if you check out in this video http://vimeo.com/99046951 is that rental properties are not only a great investment if you do it right! They can become a passive income that your can replace your current income with or stay at your day job and build your wealth on the side for an early retirement! With my FREE Wealth Accelerator System you will learn how to Double your Retirement in 45 days or Less! Watch Ron's new webinar here: https://goo.gl/KAd85k Not only will i teach you the RIGHT kind of property to look for, but i’ll also teach you how to create a positive cash flow. With our wealth plan we look at your net worth and set a goal to INCREASE net worth before retirement! You can click this link https://www.rpcinvest.com/weathplan and your current financial situation and set your financial goals and see how your net worth can grow using REAL investment properties! My main goal when i started this was to create a system that would give you FINANCIAL FREEDOM through an investment that gives you double digit returns. https://goo.gl/1MrD7G I don’t charge you a dime to learn this my system! We will help you find the right homes to start growing your WEALTH!
Views: 24384 InvestmentPropCoach
What is Return on Equity? - MoneyWeek Videos
When you analyse a company, it’s easy just to focus on how much profit a company is making. But that can be a dangerous trap. A business might generate a decent profit, but still deliver a poor return on shareholders equity. So in this video, Ed Bowsher explains how to calculate 'return on equity' and why it could be useful to you.
Views: 18019 MoneyWeek
Stockholders Equity (Rate Of Return On Common Stock Equity, C/S Shareholder Profitability)
Accounting for rate of return on common stock equity, measures profitability from the common stock shareholders viewpoint, this ratio shows how many dollars of net income the company earned for each dollar invested by the owner, return on equity (ROE) helps investors determine the worthiness of the stock even when the overall market is not doing well, rate of return on C/S equity is based on income that is available to common stock share holders after preferred stock dividend is subtracted from the net income for the period, the basic equation (net income minus P/S dividends/common stock equity minus P/S par value), common stock equity = (C/Spar + C/S APIC + R/E), detailed accounting by Allen Mursau
Views: 10115 Allen Mursau
Abnormal earnings valuation and Return on common equity CFA exam ch 6 p 3
Corporate valuation, CFA exam, MBA course, finance course, use fundamental valuation approach, Forecasting, Cash flow assessment , discounted cash flow, Technical analysis, cash flow valuation model, free cash flow, zero-growth perpetuities, constant-growth perpetuities, price-earnings , earnings multiples, abnormal earnings, ROA, return on assets, ROCE, return on common equity, fair value accounting, net present value of growth opportunities, NPVGO, permanent earnings, transitory earnings, Quality of earnings , earnings management, Sensitivity analysis
Tangible Common Equity, or TCE
Tangible Common Equity used to be an obscure and rarely-used accounting term. Today it's one of the main motivators behind the government's decision to turn the American taxpayer into one of Citigroup's biggest stockholders.
Views: 645 Ethan Lindsey
Calculating Return on Equity (ROE) in Excel
Download 33 Financial Ratios Template: http://www.officetodo.com/public/product/33-financial-ratios/ Return on equity shows how much profit a company earned in comparison to the total amount of shareholder equity. To calculate return on equity open your income statement and balance sheet. Divide net profit after tax from income statement with shareholder equity from balance sheet
Views: 19662 OfficeToDo
Dividend Discount Model (DDM) - Constant Growth Dividend Discount Model - How to Value Stocks
http://www.subjectmoney.com http://www.subjectmoney.com/definitiondisplay.php?word=Dividend%20Discount%20Model In this lesson we are teaching you how to price stocks using the Dividend Discount Model (DDM). We explain the concept of the dividend discount model (DDM) and show you the necessary assumptions along with how to get the cost of equity (discount rate) using the Capital Asset Pricing Model CAPM. We also teach you the constant growth dividend discount model and then show you how to tailor the dividend discount model according to the what is expected of the company in the future. Please don't forget to subscribe, rate and share our videos. Please also visit our website at http://www.subjectmoney.com and http://www.excelfornoobs.com https://www.youtube.com/user/Subjectmoney https://www.youtube.com/watch?v=n76Pz3HOBPo http://www.roofstampa.com hjttp://roofstampa.com http:/www.subjectmoney.com http://www.excelfornoobs.com
Views: 115536 Subjectmoney
Return on Common Stockholder's Equity
Prepared by Paige Paulsen
Views: 3006 Paige Paulsen
ROE DuPont Analysis - How to Use the DuPont Equation to Analyze a Stock - DuPont Decomposition
in this video, we go through both the 3 stage DuPont analysis and the extended DuPont (5 stage) formula. What is ROE video: https://youtu.be/XLcKalVivlI ★☆★ Subscribe: ★☆★ https://goo.gl/qkRHDf Investing Basics Playlist https://goo.gl/ky7CJq Investing Books I like: The Intelligent Investor - https://amzn.to/2PVhfEL Common Stocks & Uncommon Profits - https://amzn.to/2DAV8h9 Understanding Options - https://amzn.to/2T9gFSp Little Book of Common Sense Investing - https://amzn.to/2DfFGG2 How to Value Exchange-Traded Funds - https://amzn.to/2PWSkRg A Great Book on Building Wealth - https://amzn.to/2T8AKZ1 Dale Carnegie - https://amzn.to/2DDAk8w Effective Speaking - https://amzn.to/2DBncAT Equipment I Use: Microphone - https://amzn.to/2T7JxL6 Video Editing Software - https://amzn.to/2RQM1vE Thumbnail Editing Software - https://amzn.to/2qIUAgP Laptop - https://amzn.to/2T4xA8Z DISCLAIMER: I am not a financial advisor. These videos are for educational purposes only. Investing of any kind involves risk. Your investments are solely your responsibility. It is crucial that you conduct your own research. I am merely sharing my opinion with no guarantee of gains or losses on investments. Please consult your financial or tax professional prior to making an investment. #LearnToInvest #StocksToWatch #StockMarket
Views: 1776 Learn to Invest
Return on Equity Ratio (ROE Formula, Examples) | Calculate Return on Equity
In this video, I discuss what is ROE i.e. Return on Equity in detail. Here we look at ROE formula, calculations along with top return on equity examples. Return on Equity is a profitability ratio for shareholders. It provides how much returns the company has generated per unit of their shareholder's equity. You can calculate Return on equity using the two set of ROE formulas 1) Return on Equity Formula = Net Income / Total Equity 2) DuPont ROE Formula = (Net Income / Net Sales) x ( Net Sales / Total Assets) x Total Assets / Total Equity or DuPont Return on Equity Formula = Profit Margin * Total Asset Turnover * Equity Multiplier Also, In this video, we calculate return on equity by taking Nestle's example. For more, You can visit detailed note on Return on Equity or ROE in the link below - https://www.wallstreetmojo.com/return-on-equity-roe-dupont-roe/ Subscribe to our channel to get new updated videos. Click the button above to subscribe or click on the link below to subscribe - https://www.youtube.com/channel/UChlNXSK2tC9SJ2Fhhb2kOUw?sub_confirmation=1
Views: 533 WallStreetMojo
The Return on Equity Ratio
Help us learn more about your experience by completing this short survey: https://www.surveymonkey.com/r/RRKS8LZ Subscribe to Alanis Business Academy on YouTube for updates on the latest videos: https://www.youtube.com/alanisbusinessacademy?sub_confirmation=1 Go Premium for only $9.99 a year and access exclusive ad-free videos from Alanis Business Academy: http://bit.ly/1Iervwb View additional videos from Alanis Business Academy and interact with us on our social media pages: YouTube Channel: http://bit.ly/1kkvZoO Website: http://bit.ly/1ccT2QA Facebook: http://on.fb.me/1cpuBhW Twitter: http://bit.ly/1bY2WFA Google+: http://bit.ly/1kX7s6P Return on equity is a type of profitability ratio that measures how successful a firm is at using its investments to generate profit. Using the return on equity formula, investors can determine how much profit they're receiving for each dollar in equity investment. Not only does this financial ratio allow investors to determine if their making a good investment, but it also allows them to compare the company's performance to that of other firms. Learn more about return on equity or ROE in the latest lecture from Alanis Business Academy. __________ Photo by Rick Tap: https://unsplash.com/@ricktap
Return On Investment (ROI) or Yield... Finance Analysis on Your Next Property Investment
Should you use Return on Investment (ROI) when carrying out analysis on your next investment property? I think that's a great big "YES" :-) If you walk into any Estate Agent (Real Estate agent) across the land and ask to see their finest investment properties... I can pretty much guarantee they'll put some deals in front of you and start quoting "Yield". Now I'm not saying there's anything wrong with this and it's certainly a good place to start - however I personally ALWAYS use Return on Investment (ROI). Return on Investment gives you the ability to compare one deal against another - regardless of the finance you've used to buy the place so you can get the biggest "bang or your buck". Obviously, ROI shouldn't be the ONLY factor - but I believe it should be your go to calculation when choosing an investment. If you found this video helpful, please take a moment to subscribe to my YouTube and Facebook channels, as this way I can keep you up to date with when the next video is available for you. I've also added below a link to every property tool I use - which I thought you might find helpful :-) PLEASE SUBSCRIBE ON YOUTUBE... https://www.youtube.com/c/yourfirstfourhouses PLEASE LIKE MY FACEBOOK PAGE... https://www.facebook.com/YourFirstFourhouses FREE DOWNLOAD OF ALL MY PROPERTY TOOLS... https://yourfirstfourhouses.com/
Views: 23888 Your First Four Houses
What Is Common Equity Made Up Of?
What Is Common Equity Made Up Of?. Part of the series: Finance Questions. Common equity is made up of a few specific things. Learn what common equity is made up of with help from a business consultant and marketing expert in this free video clip. Read more: http://www.ehow.com/video_12214863_common-equity-made-up-of.html
Views: 1246 ehowfinance
WACC, Cost of Equity, and Cost of Debt in a DCF
In this WACC and Cost of Equity tutorial, you'll learn how changes to assumptions in a DCF impact variables like the Cost of Equity, Cost of Debt. By http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" You'll also learn about WACC (Weighted Average Cost of Capital) - and why it is not always so straightforward to answer these questions in interviews. Table of Contents: 2:22 Why Everything is Interrelated 4:22 Summary of Factors That Impact a DCF 6:37 Changes to Debt Percentages in the Capital Structure 11:38 The Risk-Free Rate, Equity Risk Premium, and Beta 12:49 The Tax Rate 14:55 Recap and Summary Why Do WACC, the Cost of Equity, and the Cost of Debt Matter? This is a VERY common interview question: "If a company goes from 10% debt to 30% debt, does its WACC increase or decrease?" "What if the Risk-Free Rate changes? How is everything else impacted?" "What if the company is bigger / smaller?" Plus, you need to use these concepts on the job all the time when valuing companies… these "costs" represent your opportunity cost from investing in a specific company, and you use them to evaluate that company's cash flows and determine how much the company is worth to you. EX: If you can get a 10% yield by investing in other, similar companies in this market, you'd evaluate this company's cash flows against that 10% "discount rate"… …and if this company's debt, tax rate, or overall size changes, you better know how the discount rate also changes! It could easily change the company's value to you, the investor. The Most Important Concept… Everything is interrelated - in other words, more debt will impact BOTH the equity AND the debt investors! Why? Because additional leverage makes the company riskier for everyone involved. The chance of bankruptcy is higher, so the "cost" even to the equity investors increases. AND: Other variables like the Risk-Free Rate will end up impacting everything, including Cost of Equity and Cost of Debt, because both of them are tied to overall interest rates on "safe" government bonds. Tricky: Some changes only make an impact when a company actually has debt (changes to the tax rate), and you can't always predict how the value derived from a DCF will change in response to this. Changes to the DCF Analysis and the Impact on Cost of Equity, Cost of Debt, WACC, and Implied Value: Smaller Company: Cost of Debt, Equity, and WACC are all higher. Bigger Company: Cost of Debt, Equity, and WACC are all lower. * Assuming the same capital structure percentages - if the capital structure is NOT the same, this could go either way. Emerging Market: Cost of Debt, Equity, and WACC are all higher. No Debt to Some Debt: Cost of Equity and Cost of Debt are higher. WACC is lower at first, but eventually higher. Some Debt to No Debt: Cost of Equity and Cost of Debt are lower. It's impossible to say how WACC changes because it depends on where you are in the "U-shaped curve" - if you're above the debt % that minimizes WACC, WACC will decrease. Otherwise, if you're at that minimum or below it, WACC will increase. Higher Risk-Free Rate: Cost of Equity, Debt, and WACC are all higher; they're all lower with a lower Risk-Free Rate. Higher Equity Risk Premium and Higher Beta: Cost of Equity is higher, and so is WACC; Cost of Debt doesn't change in a predictable way in response to these. When these are lower, Cost of Equity and WACC are both lower. Higher Tax Rate: Cost of Equity, Debt, and WACC are all lower; they're higher when the tax rate is lower. ** Assumes the company has debt - if it does not, taxes don't make an impact because there is no tax benefit to interest paid on debt.
Ratio Analysis: Return on Capital Employed (ROCE)
This short revision video introduces the concept of Return on Capital Employed.
Views: 85226 tutor2u
Stockholders Equity (Rate Of Return On Common Stock Equity, Trading On Equity, ROE, ROA)
Accounting for rate of return on common stock equity and trading on equity by using borrowed money or issuing preferred stock to obtain money, the money is then invested in assets, the assets are used to generate income at a higher rate on investment in excess of the borrowing rate which increases the rate of return on common stock equity, example is for deteriming ROE & applying trading on equity, Rate of Return of C/S equity = (net income - P/S dividend/C/S equity - P/S par), Trading On Equity (Borrowing money or issuing P/S) & obtaining a higher rate on the money used Corp-A has improved return on C/S Equity thru proper use of Debt & Preferred Stock financing: Shareholders win if: ROA greater than the Cost of financing assets, then return on C/S Equity exceeds rate of return on total assets, Corp-A is trading equity at a gain, money obtained from Bondholders & Preferred Stockholders earns enough to pay the interest & preferred dividend & leaves a profit for C/S Stockholders, Shareholders Lose if: If the cost of financing is higher than the rate earned on the assets , the company is trading on equity at a Loss & Stockholders lose, detailed example by Allen Mursau
Views: 3331 Allen Mursau
EPS, PE & Return on Common Stockholder's Equity
Prepared by Lynnette Yerbury
Views: 272 Paige Paulsen
Stocks for Beginners : How to Calculate Return on Stockholder Equity
Return on stockholder equity tells how much profit the company is making with money invested by stockholders. Calculate return on stockholder equity by taking the company's net income and dividing it by it's total equity in this free video from an investment professional on financial planning. Expert: Phillip Beningoso Contact: www.wearehdtv.com Bio: Phillip Beningoso has a bachelor's of arts degree with a major in finance and a minor in economics and computer sciences from Kent State University. Filmmaker: Christopher Rokosz
Views: 4097 eHow
Book Value per Share | Equity Ratio Analysis | Intermediate Accounting | CPA Exam FAR | Chp 15 p 8
Ratio analysis, book value per shares, return on stockholders equity, return on equity, payout ratio, retention ratio, financial statement analysis, profitability ratio, long term solvency ratio, ash dividend, property dividend, liquidating dividend, stock dividend, small stock dividend, large stock dividend, cpa exam
Decoding of Corporate FInancial Communications: Profitability & Risk Analysis
Profitability Analysis (Ch. 4) Risk Analysis (Ch. 5) Professor Cooperberg May 31st, 2013 Return on common equity is net income less preferred stock dividends divided by the average common stockholder's equity. It measures the return to common shareholders. It adjusts net income for nonrecurring charges, as in ROA. It subtracts costs of debt financing and preferred stock dividends. ROCE should exceed the cost of equity capital - the rate of return that a common shareholder demands. Financial leverage is using the lower cost of debt capital to increase the return to common shareholders. Earnings per share is one of the most frequently used measures of profitability. GAAP requires firms to disclose on the income statement. It is covered explicitly by the opinion of the independent auditor. There are two types of EPS - basic EPS (simple capital structure) and diluted EPS (complex capital structure). Simple capital structure is for firms that do not have convertible bonds, convertible preferred stock, stock options, or warrants. It is net income less preferred dividends divided by the weighted average number of common shares outstanding. Complex capital structure is for firms that have convertible bonds, preferred stock, stock options, or warrants. It assumes the conversion and exercising of all dilutive shares. Criticisms of EPS is that it does not consider the amount of assets or capital required to generate earnings. It cannot make comparisons accross firms because the value of each share can differ. The number of shares of common stock outstanding is a poor measure of the amount of capital in use. It remains one of the focal points of announcements and is frequently used to value firms. Time series are ratios compared over a number of periods. It must consider changes in product / geographical mix, acquisitions and divestitures, changes in accounting methods, and unusual or non-recurring amounts. Cross sectional ratios are those that can be compared across different firms. They must take into account industry definition, how industry averages are computed, and how ratios are defined / computed. Risk can be international due to exchange rate changes, host government regulations / attitudes, political unrest, expropriation of assets, and recessions. Domestic risk can be due to recessions, inflation or deflation, interest rate changes, demographic changes, and political changes. Industry risk can be due to technology, competition, regulation, availability and price of raw materials, labor and other input price changes, and unionization. Firm specific risk can come from management competence (i.e. lack thereof), strategic direction, and lawsuits. Financial risk can arise from leverage (which is a technique to multiply gains and losses). Financial leverage multiplies gains through the use of debt. Disaggregating ROCE provides insight into the degree of benefit from leverage. The higher the leverage put in place the greater the financial risk that exists. Note that debt is a good thing until you reach the "tipping point" which puts you in danger to become bankrupt. Short-term liquidity risk is the near term ability to generate cash to service working capital needs. It delays cash outflows for as long as appropriate and receives inflows as early as possible. Problems may occur, such as operating costs being greater than revenue, and a high degree of debt being incurred due to high carrying costs. Short-term borrowing can be line of credit or commercial paper. Ratio analysis is often used to assess short-term liquidity risk, such as the current ratio, quick ratio, operating cash flow to current liability ratio, revenue to cash ratio, working capital turnover ratios (accounts receivable turnover, inventory turnover, & accounts payable turnover). The current ratio is the level of cash and other current assets above short-term liabilities (calculated by dividing current assets by current liabilities). It should be greater than 1.0 but not too high. The quick ratio (acid test) is cash plus marketable securities plus accounts receivable divided by current liabilities. It only includes cash-like assets (cash equivalents). Appropriate results may differ by industry due to some subjectivity. Return on Common Equity (ROCE): 0:37 Disaggregating ROCE: 4:16 Relating ROA to ROCE: 5:56 Earnings Per Share (EPS): 6:43 Yahoo Finance (EPS and learning how to read and understand stock information): 10:59 Criticisms of EPS: 17:26 Ratio Comparisons -- Time Series: 18:05 -- Cross-sectional: 19:12 Silence (skip this): 21:31 CHAPTER 5 BEGINS: 35:22 Analyze Profitability & Risk: 36:26 Causes of Risk: 37:40 Financial Risk: 39:33 Short-Term Liquidity Risk: 42:16 Short-Term Liquidity Ratios: 45:41 Working Capital Activity Ratios - Pepsi: 54:23 Long-Term Solvency Risk: 57:23 Debt Ratios: 59:34
Why Do You Use Net Income to Calculate Return on Assets (ROA)?
You’ll learn why you pair Net Income with Return on Assets (ROA) in this lesson, as well as a rule of thumb you can use to determine how you can pair up other Income Statement metrics like Operating Income and NOPAT with the appropriate Balance Sheet metric when calculating returns-based ratios. http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" QUESTION: In the Return on Assets (ROA) calculation, why we do use Net Income? Shouldn’t we use Net Operating Profit After Taxes (NOPAT) instead since Assets represent both equity and debt investors? Return on Assets = Net Income / Average Assets It tells you how efficiently a company is using all its assets to generate profits, or how *dependent* a company is on its assets. It’s useful for comparing similar companies in an industry and seeing which ones are operating most efficiently. Other, similar metrics include Return on Equity (ROE), defined as Net Income / Average Equity, and Return on Invested Capital (ROIC), defined as NOPAT / Average Invested Capital. NOPAT = Operating Income * (1 – Tax Rate), and Invested Capital = Common Equity on the Balance Sheet + Debt + Preferred Stock + Other Possible Long-Term Funding Sources. You use Net Income with Total Assets and Equity because of the definitions of Equity Value and Enterprise Value: Equity Value: The value of ALL the company’s Assets, but ONLY to equity investors (common shareholders). Enterprise Value: The value of ONLY the company’s Core Business Assets, but to ALL investors (equity, debt, preferred, and possibly others). These pairings apply not just to valuation multiples, but also to financial metrics and ratios such as ROA, ROE, and ROIC. Net Income is only available to common equity investors because debt investors have already “been paid” with the interest they received. You subtract this interest on the Income Statement before arriving at Net Income. As a result, Net Income pairs with Equity on the Balance Sheet, Equity Value in valuation, and ALL the assets on a company’s Balance Sheet. It’s the same idea for ROE: you use Net Income because Net Income pairs with Equity on the Balance Sheet. For ROIC, NOPAT is available to ALL the investors in the company because debt investors have not yet received interest, and Preferred investors haven’t received anything, either. So you pair it with Invested Capital on the Balance Sheet, Enterprise Value in valuation, and ONLY the core business assets on a company’s Balance Sheet. So if you wanted to use NOPAT with a company’s Assets, you’d have to subtract out the non-core-business ones and create a new metric, something like “Core Business Assets.” For example, you might take a company’s Total Assets and subtract out cash, investments, equity investments, and anything else related to side activities (i.e., NOT creating and selling products to customers). And then you could pair NOPAT with this new metric: NOPAT / Core Business Assets. Maybe you could call it “Return on Core Business Assets,” or ROCBA. RESOURCES: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/105-19-Return-on-Assets-Net-Income-Slides.pdf
What is return on equity (ROE)? | Investopedia Academy
Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. ROE is expressed as a percentage and calculated as: Return on Equity = Net Income/Shareholder's Equity Net income is for the full fiscal year (before dividends paid to common stock holders but after dividends to preferred stock.) Shareholder's equity does not include preferred shares. Also known as "return on net worth" (RONW). Take the Investopedia Academy 'Find Great Value Stocks' course: http://bit.ly/2DNEk6R INVESTOPEDIA ACADEMY is expert instruction from Investopedia. Self-paced, online courses that provide on-the-job skills—all from the world’s leader in finance and investing education. Website: https://academy.investopedia.com/ Facebook: https://www.facebook.com/investopedia Twitter: https://twitter.com/investopedia
Views: 22563 Investopedia Academy
What is Return on Equity (ROE)
Return on equity (ROE) is the amount of net income returned as a percentage of shareholders’ equity. Return on equity, (also known as "return on net worth" or RONW) measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. The calculation for Return on Equity is relatively simple, ROE = Net Income/Shareholders’ Equity. ROE is typically expressed as a percentage. ROE is typically measures an entire fiscal year and is calculated before dividends are paid to common stockholders but after dividends to preferred stock holders. Shareholders' equity may not include preferred shares, and is sometimes called return on common equity (ROCE) = net income - preferred dividends / common equity. _________________________________________________________________________________________________ Join our free online community of active traders https://tackletrading.com/ and surround yourself with professional coaches and experienced, successful traders as well as new burgeoning traders looking for the right systems to trade and success-minded people to surround themselves with. Make sure to sign up for your free 15-day trial and take advantage of our powerful trading tool box, the Tackle Trading Trade Center, get our weekly Market Scoreboard and Scouting Reports as well as our daily stock market reports. SIGN UP NOW: http://bit.ly/tackle-15-day-free-trial _________________________________________________________________________________________________ DISCLAIMER: Tackle Trading LLC is providing this live broadcast and any related materials (including newsletters, blog post, videos, social media and other communications) for educational purposes only. We are not providing legal, accounting, or financial advisory services, and this is not a solicitation or recommendation to buy or sell any stocks, options, or other financial instruments or investments. Read full disclaimer here: https://tackletrading.com/legal-disclaimer/
Views: 109 Tackle Trading
How To Compute Return On Equity
Have you ever wanted to get good at math, business accounting. Well look no further than this guide on How To Compute Return On Equity . Follow Videojug's industry leaders as they steer you through this advice video. Subscribe! http://www.youtube.com/subscription_center?add_user=videojugeducation Check Out Our Channel Page: http://www.youtube.com/user/videojugeducation Like Us On Facebook! https://www.facebook.com/videojug Follow Us On Twitter! http://www.twitter.com/videojug Watch This and Other Related films here: http://www.videojug.com/film/how-to-calculate-roe
Views: 5539 Two-Point-Four
Excel Finance Class 19:Profitablility Rations: Return On Equity & Return On Assets & DuPont Analysis
Download Excel workbook http://people.highline.edu/mgirvin/ExcelIsFun.htm Learn how to calculate Return On Equity, Return On Assets, Profitablility & DuPont Analysis. Return On Investment Highline Community College Busn 233 Slaying Excel Dragons Financial Management with Excel taught by Michael Girvin.
Views: 28075 ExcelIsFun
Earnings Per Share (EPS) - Explained in Hindi
Earnings per share (EPS) and P/E ratio (Price Earning Ratio) explained in hindi. EPS & PE Ratio calculation helps you in stock valuation i.e whether a particular share is a value buy or not. Related Videos: Share Price & Market Capitalization: https://youtu.be/oq5U-mRJ61w Large Cap, Mid Cap, Small Cap and Blue Chip Stocks & Mutual Funds: https://youtu.be/1KMMqlSyiDE Sensex & Nifty 50: https://youtu.be/-td1KvGcxXA Free Float Market Capitalization - Sensex & Nifty: https://youtu.be/z-mA4JYTZJQ Book Value, Market Value, Face Value of Share: https://youtu.be/bQEjzWssWOg अर्निंग्स पर शेयर (EPS) और P/E रेश्यो (प्राइस अर्निंग रेश्यो) को इस वीडियो में हिंदी में समझाया गया है। ईपीएस और पीई रेश्यो की गणना आपको स्टॉक वैल्यूएशन में मदद करती है यानि की को शेयर खरीदने के लिए उपयुक्त है या नहीं। Share this Video: https://youtu.be/SDXp64flfJI Subscribe To Our Channel and Get More Property and Real Estate Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g If you want to become an Expert Real Estate investor, please visit our website https://assetyogi.com now and Subscribe to our newsletter. In this video, we have explained: What is earning per share ratio or P/E ratio? How to evaluate shares value before investing in stock? How to do the financial analysis before investing in stock? Why earning per share is an important metric? How to calculate EPS & PE Ratio? How does EPS & PE Ratio help in stock valuation? What is the price earning ratio? How to calculate profit before tax for stock investments? What is the meaning of preferred shareholders and common shareholders? How to do fundamental analysis of buy value of a share? What is the meaning of current EPS and forward EPS? What is the meaning of trailing EPS? How EPS is different from the P/E ratio? How to know if a share is expensive or inexpensive? Make sure to Like and Share this video. Other Great Resources AssetYogi – http://assetyogi.com/ Follow Us: Pinterest - http://pinterest.com/assetyogi/ Linkedin - http://www.linkedin.com/company/asset-yogi Google Plus – https://plus.google.com/+assetyogi-ay Twitter - http://twitter.com/assetyogi Instagram - http://instagram.com/assetyogi Facebook – https://www.facebook.com/assetyogi Hope you liked this video in Hindi on “Earnings Per Share (EPS)”.
Views: 34172 Asset Yogi
Preference (Preferred) Shares & Equity Shares - Types of Shares in Hindi
2 major types of shares - preference shares (preferred shares) and common equity shares (ordinary shares) are explained in hindi. Preference shares (preferred stock) और common equity shares (ordinary shares) को हिंदी में समझाया गया है । Share this video: https://youtu.be/5VqpNoL3J1g Subscribe To Our Channel and Get More Finance Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g To access more learning resources on finance, check out www.assetyogi.com In this video, we have explained: What is preference share? What is common equity share? Why does a company issue preferred share? What is the difference between preference and equity shares? What are the advantages of preference shares? Can a private limited company issue preference stock? Is it compulsory to pay dividend on preferred shares? Are preference shares traded in stock market? Are preference shareholders owners of the company? Who are equity shareholders? What are advantages of equity shares? What are the features of preferred shares? Can preference shareholders vote? Which type of return we get in preference share and equity share? Which type of investors invest in preference share and equity share? Make sure to like and share this video. Other Great Resources AssetYogi – http://assetyogi.com/ Follow Us: Twitter - http://twitter.com/assetyogi Instagram - http://instagram.com/assetyogi Linkedin - http://www.linkedin.com/company/asset-yogi Pinterest - http://pinterest.com/assetyogi/ Facebook – https://www.facebook.com/assetyogi Google Plus – https://plus.google.com/+assetyogi-ay Hope you liked this video in Hindi on “Preference (Preferred) Shares & Equity Shares”.
Views: 45303 Asset Yogi
Financial Analysis
An overview of common-sized financial statements and ratio analysis.
Views: 97 Russell Jacobus
Asset Turnover Ratio, Profit Margin On Sales Ratio, Rate Of Return On Assets (ROI)
Accounting for evaluating assets relative to activity (turnover) and profitability, 1-Asset Turnover Ratio, 2-Profit Margin on Sales and 3-Rate of Return on Assets, (1) Asset Turnover Ratio: How efficiently a company uses its assets to generate sales, (net sales/average total assets) = equals asset turnover ratio, (2) Profit Margin on Sales Ratio: (Rate of Return on Sales), how profitably the company uses its assets, (net income/net sales) = profit margin on sales, and (profit margin on sales x asset turnover ratio) =rate of return on assets, (3) Rate of Return on Assets (ROI): The rate of return a company acheives through use of its assets, (net income/average total assets) = rate of return on assets, detailed calculations by Allen Mursau
Views: 18825 Allen Mursau
Business Accounting : Understanding Return on Equity
A return on equity can be calculated by dividing the net income by the average shareholder's equity. Find out how to determine how well management is using funds from shareholders with information from a certified public accountant in this free video on accounting. Expert: Miranda Chook Bio: Miranda Chook is a CPA with expertise in international operations. Filmmaker: Bing Hugh
Views: 2046 eHow
Shareholders Equity, Dividend  Payout & Return on Common Equity for PepsiCo 2017
This video discusses disclosures from PepsiCo's 2017 Annual Report/10-K for shareholders equity and the calculation and interpretation of the dividend payout and return on common equity (ROCE) ratios.
Views: 14 Mary Michel Ph.D.
#3 Ratio Analysis [Solvency Ratios] ~ Concept behind formation of a Formula
Described the concept, reason and logic behind formation of different formulas of analysis of financial statements. I have discussed the core concept of contents used in the following formulas: 1. Debt Equity Ratio 2. Total Assets to Debt Ratio 3. Proprietary Ratio 4. Interest Coverage Ratio (not relevant for Class 12) 5. Debt Service Ratio (not relevant for Class 12) 6. Capital Gearing Ratio (not relevant for Class 12) 🔴 Download Notes: https://drive.google.com/drive/folders/0BzfDYffb228JNW9WdVJyQlQ2eHc?usp=sharing 🔴 Connect on Facebook : https://www.facebook.com/ca.naresh.aggarwal 🔴 Connect with Google+: https://plus.google.com/u/0/+CANareshAggarwal
Views: 64976 CA. Naresh Aggarwal
Financial Statement Analysis #6: Ratio Analysis - Market Value Measures
http://www.subjectmoney.com http://www.subjectmoney.com/articledisplay.php?title=Financial%20Statement%20Analysis%20and%20Ratios In this financial statement analysis lesson we cover ratios know as market value measures. Market value measures need the stock price to be calculated therefore they are useful for publicly traded companies. The ratios we cover are market to book ratio, book value, the pe ratio or P/E ratios or price to earnings ratio, the eps or earnings per share, enterprise value, market capitalization and enterprise value multiple. Please be sure the subscribe, rate & share our videos. Please also visit our website at http://www.subjectmoney.com and http://www.excelfornoobs.com https://www.youtube.com/user/Subjectmoney https://www.youtube.com/watch?v=GUVbPr88rOA
Views: 34464 Subjectmoney
Return on Equity
» Investing Philosophy » Return on Equity Return on Equity Return on Equity is a measure of how efficient a company is at generating profits. In order to calculate the value of a company's stock we need to consider the profitability of that company. It is important to understand that profitability is not the same as profit.
Views: 85 ClimeAsset
How to find the Expected Return and Risk
Hi Guys, This video will show you how to find the expected return and risk of a single portfolio. This example will show you the higher the risk the higher the return. Please watch more videos at www.i-hate-math.com Thanks for learning !
Views: 216951 I Hate Math Group, Inc
Cost of Capital and Cost of Equity | Business Finance
http://goo.gl/qQjWG8 for more free video tutorials covering Business Finance. This video explains two important concepts of business finance- cost of capital & cost of equity. First part of the video discusses on cost of capital drawing an example of a firm in terms of debt and equity. The cost of capital primarily depends upon the use of funds not the source. Next, the video briefly discusses on cost of equity referring the returns that investors holding shares in a firm require subsequent to an explanation on SML approach and dividend growth model. Moving on the video also asks to calculate the cost of equity for an example of extremely prices shares. Step by step calculation has shown and ways to find out some important parameters are demonstrated visibly. Good understanding on cost of capital; cost of equity & there in between relationship as well as having knowledge on different methods of calculation is imperative to become an expert on today’s business finance and accountancy.
Views: 140848 Spoon Feed Me
Financial Accounting: Paid-in Capital & Balance Sheet AND Effects on Retained Earnings and I/S
Introduction to Financial Accounting Corporations: Paid-in Capital & the Balance Sheet (Chapter 12) Corporations: Effects on Retained Earnings & the Income Statement (Chapter 13) April 29th, 2013 by Professor Victoria Chiu The lecture begins with a brief review of the topics discussed in the previous class session (such as dividing dividends between preferred and common stockholders). The more specific characteristics of preferred stock dividends are discussed next. When preferred stock is classified as "cumulative," it means that even when it is not paid dividends in a given year, the company still owes it to them and will eventually give it to them. "Dividends in arrears" is simply the term assigned to unpaid dividends that will later be paid. Common stockholders cannot be rewarded with any dividends until preferred stockholders are paid ALL the dividends in arrears that they are owed. Noncumulative preferred stock, on the other hand, simply means that unpaid dividends of preferred stock do not accumulate to the next year. However, most preferred stock is cumulative, and should only be considered otherwise if specifically noted. An example is walked through, including the journal entries involved as well, followed by several problems. Following this, the Professor discusses significant ratios, such as ROA and ROE, how to calculate them, and their purposes (what they measure). ROA is the rate of return on assets, which can be found by adding up net income and interest expense and dividing the sum by the average total assets. It measures a company's success in using assets to earn income (in other words, how well is the company using its assets to earn income). The higher the rate, the better (a rate of 10% is considered "good"). ROE is the rate of return on equity. It is calculated by subtracting preferred dividends from net income and then dividing the difference by the average common stockholder's equity. This ratio measures the relationship between total net income available and their average common equity invested in the company. Most companies consider a rate of return on equity of 15% to be acceptable. A problem involving the calculations of ROA and ROE is performed. Following this, the Professor moves on to discuss the topic of stock dividends. These are mostly issued to conserve cash and make each share worth less (its market price will go down when there is more shares available, and there will be more shares when the company is issuing them in place of dividends). A lower market price can attract investors. Stock dividends decrease retained earnings and increase paid in capital. The issuance of stock dividends does not change the total stockholder's equity - it simply rearranges its components. It also has zero effect on assets or liabilities. Stock dividends involve the same three significant dates for normal cash dividends (declaration date, record date and distribution date). Only on the distribution date are any journal entries written to record the transaction. Unlike cash dividends, the declaration of a stock dividend does not create a liability because the corporation is not paying out assets but rather distributing stock (a type of equity). The Professor then compares small and large stock dividends, shows the effects of small and large stock dividends on the balance sheet, and then briefly introduces treasury stock before closing the lecture. ------QUICK NAVIGATION------ Dividing Dividends Between Preferred & Common (with illustration): 1:26 Preferred Stock - Cumulative & Noncumulative Dividends: 8:48 Cumulative & Noncumulative Preferred Stock: 12:19 Multiple Choice Exercise: 15:02 Exercise S12-8 - Accounting for Cash Dividends: 19:45 Exercise S12-8 - Solution Review: 22:55 Evaluating Return on Assets & Return on Stockholder's Equity: 26:58 Rate of Return on Total Assets (ROA): 27:06 Rate of Return on Common Stockholder's Equity (ROE): 34:14 Exercise S12-11 - Compute Return on Assets & Return on Equity: 38:37 Exercise S12-11 - Solution Review: 41:55 Multiple Choice Exercise: 46:22 NEW TOPIC BEGINS HERE Chapter 13 - Corporations: Effects on Retained Earnings and the Income Statement: 49:46 Overview of Learning Objectives: 49:51 Accounting for Stock Dividends & Why Companies Issue Them: 50:21 Stock Dividend: 52:31 Entries for Stock Dividend: 55:40 Stockholder's Equity Presentation: 1:02:57 Exercise S13-2 - Comparing / Contrasting Cash / Stock Dividends: 1:06:20 Treasury Stock (overview): 1:10:40 Accounting for Treasury Stock: 1:12:50 Treasury Stock Journal Entries: 1:14:23 To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
#1 Cost of Capital [Cost of Debt, Preference Shares, Equity and Retained Earnings] ~ FM
Described the procedure and concept to calculate cost of Debt, Cost of Preference Shares, Cost of Equity and Cost of Retained Earnings. Student can also watch the following lectures related with the Financial Management : 1. Capital Budgeting (Introduction) - Financial Management : https://www.youtube.com/watch?v=ZOaGNDmKpzo 2. Present Value of Perpetuity : https://www.youtube.com/watch?v=gVxvJ_JTiug 3. Time Value of Money (Introduction) - Financial Management : https://www.youtube.com/watch?v=oeox8DLagHU 4. Leverage Analysis (Introduction) Financial Management : https://www.youtube.com/watch?v=3l1iB_-xZBw 5. Cash Budget (Introduction) : https://www.youtube.com/watch?v=s1Yx5bFOZfo 🔴 Connect on Facebook : https://www.facebook.com/ca.naresh.aggarwal 🔴 Download Assignments: https://drive.google.com/drive/folders/0BzfDYffb228JNW9WdVJyQlQ2eHc?usp=sharing 🔴 Connect with Google+: https://plus.google.com/u/0/+CANareshAggarwal #CostOfCapital #FinancialManagement
Views: 217103 CA. Naresh Aggarwal
Intrinsic Value of a Stock Problem
Principles of Finance Class- Intrinsic value of a stock. If you have the dividend payout, growth rate and needed return. Textbook problem
Views: 81892 Tim Liptrap
FRM: Bank Balance Sheet & Leverage Ratio
Stylized balance sheet of depository institution to illustrate (1) high leverage, (2) dependency on spread (ROA - COF) and (3) key ratios: leverage, and Basel's Tier 1 leverage ratio. For more financial risk videos, visit our website! http://www.bionicturtle.com
Views: 75637 Bionic Turtle
Calculating stock beta using Excel
Download the excel file here: https://codible.myshopify.com/products/excel-file-to-go-with-calculating-stock-beta-using-excel Description: How to calculate beta for a stock using Excel 2010. Some good books on Excel and Finance: Financial Modeling - by Benninga: http://amzn.to/2tByGQ2 Principles of Finance with Excel - by Benninga: http://amzn.to/2uaCyo6
Views: 344733 Codible
Equity vs Debt - Hindi
What is Equity? What is Debt Investment & Fund Raising meaning? When you invest in an Asset or Business, you have mainly two choices to raise funds - Equity and Debt. Similarly, you can also invest in Equity Investment products such as Equity Shares, Mutual Funds, ULIP, ELSS, Private Equity, Venture Capital etc. or you can invest in Debt Instruments such as Loans, Corporate Bonds, Government and Infrastructure Bonds, Debt Mutual Funds & ULIPs etc. Related Videos: NPV (Net Present Value): https://youtu.be/SpHIBfPGwx8 IRR (Internal Rate of Return): https://youtu.be/x6eXfx2Tv-w Discount Rate: https://youtu.be/XqqD1d713W8 इक्विटी इन्वेस्टमेंट और फंडरेज़िंग क्या होता है? डेब्ट इन्वेस्टमेंट और फंडरेज़िंग का अर्थ क्या है? जब आप किसी संपत्ति या व्यापार में निवेश करते हैं, तो आपके पास फंड्स रेज़ करने के लिए मुख्य रूप से दो विकल्प होते हैं - इक्विटी और डेब्ट। इसी तरह, आप इक्विटी शेयर, म्यूचुअल फंड, यूएलआईपी, ईएलएसएस, प्राइवेट इक्विटी, वेंचर कैपिटल इत्यादि जैसे इक्विटी निवेश प्रोडक्ट्स में भी निवेश कर सकते हैं या आप लोन, कॉर्पोरेट बॉन्ड, गवर्नमेंट एंड इंफ्रास्ट्रक्चर बॉन्ड, डेब्ट म्यूचुअल फंड और यूएलआईपी आदि जैसे डेब्ट इंस्ट्रूमेंट्स में इन्वेस्ट कर सकते हैं। Share this Video: https://youtu.be/5CWrpR6mcFw Subscribe To Our Channel and Get More Property and Real Estate Tips: https://www.youtube.com/channel/UCsNxHPbaCWL1tKw2hxGQD6g If you want to become an Expert Real Estate investor, please visit our website https://assetyogi.com now and Subscribe to our newsletter. In this video, we have explained: What is the meaning of equity investment and fundraising? What is debt investment & fundraising? What is the definition of equity? What is debt? How funds are raised using equity or debt for asset or business? What are some common equity investment product? How does equity fundraising work? What is the concept of equity fundraising? What is the basic concept of equity and debt? How is the concept of equity and debt used in business? What is the difference between equity fundraising and debt fundraising? What options are there for equity or stock investments? Make sure to Like and Share this video. Other Great Resources AssetYogi – http://assetyogi.com/ Follow Us: Google Plus – https://plus.google.com/+assetyogi-ay Twitter - http://twitter.com/assetyogi Facebook – https://www.facebook.com/assetyogi Linkedin - http://www.linkedin.com/company/asset-yogi Pinterest - http://pinterest.com/assetyogi/ Instagram - http://instagram.com/assetyogi Hope you liked this video in Hindi on “Equity & Debt - Investment & Fundraising”.
Views: 78250 Asset Yogi