Rron Case

Return on equity tells you how effectively a company is using the dollars invested in it by stockholders. ROE is the most often quoted single statistic when describing a firm 's performance. It is also one of the statistics considered to be most useful by stockholders.

* Return on assets (ROA) – ROA shows how successful a company is in generating profits on the amount of assets they own. Since assets consist of debt and equity, ROA is a measure of how well a company converts investment dollars into profit. The higher the percentage, the more profit a company is generating per dollar of investment. Similar to ROS, this ratio needs to be looked at compared to the industry as different industries have different requirements that can affect ROA. For example, companies in the airline and mining industries need expensive assets to operate so will have lower ROA’s compared to companies in the pharmaceutical or advertising industries.

First of all, return on asset (ROA) is a ratio used to measure how efficient a company generates profit using its assets, which is the invested capital. We noticed that HH’s ROA was increasing from 2006 to 2010. However, HH’s ROA for 2011 dropped dramatically from 18.41%(year

According to ROA, ANZ’s profitability fell short of Westpac’s by 0.146%, with the ROA percentage at 0.95% and 1.096% respectively (Appendix A). The difference in profits is caused by Westpac’s substantially higher total assets, which outweigh ANZ’s by $75,740,000. Although ANZ has a greater level of liquid assets, Westpac’s substantially higher loan portfolios generate higher returns. The lower ROA is caused by ANZ’s interest-bearing assets under-performing, or carrying lower risks leading to lower yields, or a greater reliance upon non-interest bearing assets. ROE is linked to ROA through the EM.

Return on Assets (ROA) of 8.74% and Return on Equity (ROE) of 12.4% are both positive.

Various financial ratios are used by managers and investors to analyze company's financial health. In this section we describe return on equity analysis to measure the Southwest's performance. ROE is viewed as one of the most important financial ratios. It is used in an effort to evaluate management's ability to monitor and control expenses and to earn a profit on resources committed to the business. Three levels of ROE ratios assess Southwest Airlines' strengths and weaknesses, operating results and growth potential. These ratios are used to measure how efficiently the assets are being used to generate net income and sales. The ratios also allow

Return on Total Assets was 4.43% which is below five percent. That indicates that the company is not accurately converting its assets into profit. The total for Return on Stockholders’ Equity was 8.89%, however financial analysts prefer ROE to range between 15-20 %. The company’s low ROE indicates that the company is not generating profit with new investments. Lastly, Debt-to-Equity ratio for the company was 1.01 which indicates that investors and creditors are equally sharing assets. In the view of creditors, they see a high ratio as a risk factor because it can indicate that investors are not investing due to the company’s overall performance. The totals of these three ratios demonstrate that the company’s financial state is not as healthy as it should be.

| For every $1 in assets, the company generates 10.8 cents net income-in accounting terms, which gives us a return of 10.8% and is considered highly effective in such business

Traditionally, we have been taught that there are some simple ratios such as Net Income Assets (ROA) or Net Income over Equity (ROE) that allow you to gain a broad understanding of the firm's profitability. Table: Profitability has calculated the broad ROA and the traditional ROE is similar to the decomposed ROE. These numbers show that Net Income for FedEx is comparatively much smaller than UPS's Net Income in relation to assets and equity. For each dollar invested in equity UPS earns 23 cents versus FedEx's 15 cents per dollar of equity. Likewise, UPS earns 11 cents versus FedEx's 7 cents per dollar of assets.

During this period, the Return on Assets increased from 5.7% in 2012 to 34.6% in 2013. This implies the number of cents earned on each dollar of assets increased from 2012 to 2013. This shows that the business has become more profitable. Equally, the Return on Equity also increased from 12.0% in 2012 to 46.5% in 2013. This similarly implies that the company in 2013 was more efficient in generating income from new investment. This, also can be attributed to the sale of the Digital Business Brand which enabled the company appraise its strategic plan.

This tells us what the company can do with what it has, i.e. how many dollars of earnings they derive from each dollar of assets they control. Return on assets gives an indication of the capital intensity of the company, which will depend on the industry; As Star River requires large initial investments it generally has lower return on assets.

The average quarterly total return of FCNTX (equity with income) is 13.30 per cent since inception, which means if invested $100 in the Q1 of 1967 when the company started up, $34,525.10 dollars will be returned in 2015 Q3, and the gain has been expanded by 34,425%.

The X7 profitability is at -10%, an increase of 52%. The cumulative profit score is 923,500,610.

Return on equity (ROE) - Calculated by dividing net income by the shareholders ' equity. (ROE = Profit or loss for the year attributable to company shareholders x 100 ÷ Total company shareholders ' equity).

ROE is different from ROA because of financial leverage = debt. Debt ampllifies in relation to ROA