The calculation formula of return on net assets is net assets per share divided by earnings per share, which can help us understand the profitability of the company and the return on shareholders' equity. Let's use an actual case to illustrate this formula and its application.
Assuming that a company's net assets are 6,543,800,000 yuan and its total share capital is 20,000,000 shares, the net assets per share are 6,543,800,000 yuan/20,000,000 shares =5 yuan. At the same time, the company's net profit is 2 million yuan and income tax is 500,000 yuan, so the earnings per share is (2 million yuan-500,000 yuan)/20 million shares =0.075 yuan.
According to the calculation formula of ROE, ROE = earnings per share/net assets per share =0.075 yuan /5 yuan =0.0 15= 1.5%.
Through the above calculation, we can know that the company's return on equity is 1.5%. This means that the income created by the company's shareholders' equity per share is 1.5%. The higher the return on net assets, the stronger the company's profitability and the higher the return on shareholders' equity.
ROE is widely used, which can not only help investors choose companies with good profitability to invest, but also help companies evaluate their profitability. For investors, we can choose the most attractive investment object by comparing the return on net assets of different companies. For the company, it can improve its profitability and attract more investors by increasing the return on net assets.
ROE is not the only indicator to measure a company's profitability, but also needs to be comprehensively analyzed in combination with other financial indicators. For example, investors also need to pay attention to the company's sales revenue, operating profit margin, cash flow and other indicators in order to fully understand the company's profitability and financial situation.
The calculation result of ROE is also influenced by accounting policies and accounting standards. Different accounting policies and accounting standards may lead to different calculation results of return on net assets, which we need to pay attention to in comparative analysis.
In investment decision-making, it is very important to know the calculation formula of return on net assets. It can help investors understand the company's profitability and return on shareholders' equity, and provide reference for investment decisions. At the same time, it is also an important indicator for the company to evaluate its own profitability. The return on net assets is not the only indicator to measure a company's profitability, and it needs to be comprehensively analyzed in combination with other financial indicators. When making investment decisions, we should comprehensively consider multiple indicators and fully understand the profitability and financial status of the company.