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Know what ROE is and how to measure shareholder return

What is ROE?

ROE (Return on Equity) is a ratio that measures how well a company can generate a return on equity or equity. has a percentage. The calculation method is as follows:

• Net Profit is the profit after deducting expenses such as costs, interest, or taxes.
• Owner’s equity or equity (Equity) is the value of shareholders. Measured in million baht Calculated as total assets minus liabilities of the entity.

Calculation example

MP Company has assets of 10 million baht, divided into shareholders’ equity of 4 million baht and liabilities of 6 million baht and can generate a net profit of 2 million baht.

So we get ROE = 2/4 = 50% or we get 50 percent ROE.

This means that the company can use the owner’s equity of 100 baht to generate a return of 50 baht.

How to view the value of ROE

• If ROE > 0 or positive , it means that the company can generate returns for shareholders.
• If ROE < 0 or negative , it means the company loses. and unable to generate returns for shareholders

So what is the appropriate ROE value?

The higher the value, the better. Because that means the business can generate a lot of profits or returns for shareholders.

But how high is the ROE required?

no fixed answer Because each company generates income with a different context. both in terms of business model, industry model or even the economic factors But we can measure performance by taking the current ROE against the past. to measure profit growth Or compare it with businesses that have similar operating characteristics. Investors tend to find businesses with ROEs higher than 15 percent or more.

So where can we see the ROE value?

Method 1: Access via TradeMaster program

1. Login to TradeMaster program
2. Select the Market Info menu.
3. Go to the Fundamental function.
4. Type the name of the stock you are interested in in the search box.

Method 2: Access through the Stock Signals program on the Securities website.

Login to use Securities website

1. Select the Stock Signals menu.
2. Select the Summary function.
3. Type the name of the stock you are interested in in the search box.

Method 3 Access via Aspen for browser program

Login to Securities website

1. Select the Aspen menu.
2. Select Function Fundamental > Financial.
3. Type the name of the stock you are interested in in the search box.

How to scan for stocks or companies with ROE greater than 15%?

Even better!!! Bualuang Securities customers can automatically scan for stocks with Strategy Builder by creating conditions that you are interested in easily through the Trade Master program as follows…

• Create a condition with the left-hand menu. and choose to set a condition (condition) by finding ROE from 15 – 100% or more
• Once our strategy (Strategy) has been created. The screen will appear stocks with ROE ranging from 15 to 100% or stocks that qualify from the Results page.
• Or you can scan for stocks through the Stock Signals program.