Return on equity (ROE), calculated by dividing net income by shareholder equity during a particular period, measures the return that management has produced on the money invested into the business.
My final warning is not to become a CEO who sacrifices long-term shareholder equity considerations for short-term financial benefits.
Something strange happens when you shift the metric from Return on Assets to Return on Equity, or shareholder funds.
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Many firms deliberately manage their ratio of outstanding debt to shareholder equity.
The software maker has generated an average return on shareholder equity of around 40% over the last five years and has a pristine balance sheet.
Gannett investors should note that Gannett could be the next Tribune unless the CEO finds a way to move Gannett into growth markets which can increase shareholder equity.
This has created a new market for large existing vendors and emerging-growth providers of intelligent hardware, software applications and cloud services, while also generating billions in shareholder equity.
That being said, while a dilution of shareholder equity may seem less than ideal to current investors, it will ensure the survival of the company (at least for the time being).
The ratio divides net income by shareholder equity.
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One looming lawsuit against Hollinger International's directors is from Cardinal Value Equity Partners, a shareholder in Hollinger International.
At least 100 companies have adopted a new plan since January 2012, while another 175 have amended their existing plans, says Kelly Crean, the governance, shareholder and equity team leader at benefits consultant Mercer.
It consequently learned the importance of return-on-equity and other measures of shareholder value.
Finally, all companies have long-term debt totaling no more than 50% of total capitalization (debt plus shareholder's equity) and a tax rate of at least 25%.
Though a lot of private equity investors present themselves as shareholder advocates who, by virtue of controlling the purse strings can squeeze corporate managers, they're actually conflicted.
Stock market mispricing induces the controlling shareholder to sell overpriced equity, subsequently diverting resources to his benefit.
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Reshaping the equity market structure is about creating shareholder value.
Free cash flow growth rates combined with shareholder yield measures will dominate equity returns going forward.
Three of the nation's top investment banks, three of the nation's top law firms, a prominent auditor, the SEC, and a top private equity firm (Refco's largest shareholder) all failed to uncover the fraud.
We recently announced that Elevation Partners, a private equity firm, has become a minority shareholder in a newly formed company, Forbes Media, now the publisher of this magazine, Forbes.com and our other media properties.
It is that this is an equity that once destroyed an astonishing amount of shareholder value.
Just the opposite, rising shareholder value requires an increase in equity value caused by profitable revenue growth.
Ron Sommer, Telekom's boss once a hero of Germany's nascent equity culture, but now a perennial target of shareholder groups and the press has fallen out publicly with Deutsche Bank, Germany's biggest bank, which last week sold a huge batch of Telekom shares, sending the share price plummeting (see article).
She was not the biggest shareholder in her web site, owning less equity than her financial backers like Softbank Capital.
Ssangyong Oil Refining, the biggest shareholder in Ssangyong Motor, boasts shareholders' equity of 1.1 trillion won and a capital-reserve ratio of 385%.
The idea seems to be only fueling shareholder ire as a PIPE would dilute existing stock equity and could deprive investors of a sale premium.
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But then a French private-equity firm, PAI Partners, suddenly appeared as Atos Origin's largest single shareholder two weeks ago, and said it backed the management's strategy.
Now you can convert, like we do for corporate restructuring, some of that debt into equity if you reduce the face value and then you make the creditor effectively a shareholder in the house by giving them the upside to warrants.
In January, US private equity firm General Atlantic LLC bought secondary shares of Kaspersky, making it the second largest shareholder in the company behind Mr. Kaspersky himself.
Or like the need to build equity capital to meet higher regulatory requirements, lest at some point they are forced to dilute shareholder value by having to issue more common stock.
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