Roe - return on equity, Finance Basics

ROE - Return on Equity

1009_ROE – Return on Equity.png


The average of the industry ROE was 21.38% for 2004, 24.99% for 2005, and 23.56% for 2006. The chart showed that after the acquisition of IBM PC division, Lenovo's ROE dropped from 22% to 2%. The investors would not be happy to see that. But consider that the new formed company, investors would be patient for them to get back with large ROE. Lenovo's ROE has been up from 2005 to 2006, but it was still below industry average. It tells everybody that Lenovo needs to generate more profit to satisfy investors. The major problem here is how to get rid of debt and reduce costs in order to gain more profit. (See Exhibit ratios)

Posted Date: 4/1/2013 2:35:16 AM | Location : United States







Related Discussions:- Roe - return on equity, Assignment Help, Ask Question on Roe - return on equity, Get Answer, Expert's Help, Roe - return on equity Discussions

Write discussion on Roe - return on equity
Your posts are moderated
Related Questions
Question 1: a) Explain the framework put forward by the Basel Committee to ensure that banks and supervisors give appropriate attention to the second (supervisory review) and

A new pet shop wants to apportion their investment money $132,000 for advertising, building upgrades, and education in the ratio of 5:4:3. How much money does each category get app

Management of Account Receivable In order to keep current customers and attract new ones, most firms find it necessary to offer credit. Accounts receivable represents the exte

1.) Assume a $1000 face value bond has a coupon rate of 8.5 percent, pays interest semi-annually, and has an eight-year life. If investors are willing to accept a 10.25 percent rat

Shareholders Expectation and Growth Stage Growth Stage Dividend policy is likely to be influenced with firm's growth stage as like a young rapidly growing firm is probabl

Joint Stock Companies - Types of Business Organisations Initiators contribute to the capital support of those companies via the purchase of shares of those companies. These co

What are the Advantages of placement Placement has the below benefits: (i) Timing of issue is significant for successful floatation of shares. In a depressed market cond

Debtors or Accounts Receiver Turnover Formula is as follow: Debtors/accounts receiver turnover  = Annual credit sales/Average debtor The ratio signify the number of ti

Interest Rate Levels and Stock Prices Interest rates contain two effects on corporate profits: a) Since interest rate is a cost, and like the higher the rate of interest the

Compute the risk premium for the stock of Omega Tools if the risk free rate is 6%, the expected market return is 12%, and Omega's stock has a beta of .8.    Ome