2. The average return on equity of the enterprise in the past five years is 10.
3. The growth rate of enterprise net profit can predict the growth prospects of enterprises.
4. Whether the soundness of corporate financing leverage and financial arrangement is lower than the industry average and whether it is reasonable.
5. The dividend payment rate of the enterprise.
6. And your expectation of compound return on investment. The return on net assets of the selected enterprise is related to your expectation of compound return on investment. In the long run, the growth of stock price is synchronous with the growth of enterprise's return on assets, and the so-called value determines the price. Theoretically, if the company takes net assets as capital and borrows money to make money, in the long run, the final compound rate of return of the stock you hold will also be the rate of return on net assets. Therefore, from the perspective of long-term value investment, if you require a higher rate of return on investing in stocks, then the company's return on net assets must be higher. Otherwise, unless you buy at a discount below your net assets, of course, this is rare, only when there is a stock market crash or a black swan incident. Judging from the current A-shares, only bank shares can be discounted below the net assets, but the expectation of future performance growth of banks will not be high.
Brief introduction of return on net assets:
1, (ROE for short), also known as ROE/ROE/ROE/ROE/ROE/ROE/ROE/ROE/ROE, is the percentage of net profit and average shareholders' equity, and it is the percentage of after-tax profit divided by net assets of the company. This index reflects the income level of shareholders' equity and is used to measure the efficiency of the company's use of its own capital. The higher the index value, the higher the return on investment. This indicator reflects the ability of self-owned capital to obtain net income.
2. Generally speaking, the increase of liabilities will lead to the increase of return on net assets. Enterprise assets include two parts, one is shareholders' investment, that is, owners' equity (it is the sum of capital invested by shareholders, enterprise provident fund and retained earnings, etc.). ), and the other part is the funds borrowed and temporarily occupied by enterprises. Appropriate use of financial leverage by enterprises can improve the efficiency of capital use. Excessive borrowing capital will increase the financial risk of enterprises, but in general, it can increase profits. Borrowing too little money will reduce the efficiency of the use of funds. Return on net assets is an important financial indicator to measure the efficiency of shareholders' capital use.