How to Calculate ROE?

 Hey,

I just wanted to share with you the latest WallStreetMojo Blog. Let me know what do you think.

Return on Equity (Definition, Formula)| How to Calculate ROE?

Return on Equity is a profitability metric that is used to compare the profits earned by a business to the value of its shareholders’ equity. ROE is calculated as Net Income divided by Shareholders Equity and is presented as a percentage. A 15% ROE indicates that the corporation earns $15 on every $100 of its share capital.

Interpretation of Return on Equity

You can interpret ROE by expanding the ROE formula and make use of Dupont ROE equation.

DuPont ROE = (Net Income / Net Sales) x ( Net Sales / Total Assets) x Total Assets / Total Equity

DuPont Return on Equity   = Profit Margin * Total Asset Turnover * Equity Multiplier

Now you can interpret that they all are separate ratios. If you are wondering how come we have come to the conclusion that if we multiply these three ratios, we will get a return on equity, here’s how we have reached a conclusion.

• Profit Margin = Net Income / Net Sales
• Total Asset Turnover = Net Sales / Average Total Assets (or Total Assets)
• Equity Multiplier = Total Assets / Total Equity

Click to Continue

WACC (Weighted Average Cost of Capital) | Step by Step Guide

 Hey,

I just wanted to share with you the latest WallStreetMojo Blog. Let me know what do you think.

WACC (Weighted Average Cost of Capital) | Step by Step Guide

 

Weighted average cost of capital is the average rate of return a company is expected to pay to all of its shareholders who; which includes, debt holders, equity shareholders and preferred equity shareholders; who have a different rate of return each because of the pecking order and hence the difference in weighted average cost of capital.

WACC Formula

Many investors don’t calculate WACC because it’s a little complex than the other financial ratios. But if you are one of those who would like to know how weighted average cost of capital (WACC) works, here’s the formula for you

WACC Formula = (E/V * Ke) + (D/V) * Kd * (1 – Tax rate)

• E = Market Value of Equity
• V = Total market value of equity & debt
• Ke = Cost of Equity
• D = Market Value of Debt
• Kd = Cost of Debt
• Tax Rate = Corporate Tax Rate

The equation may look complex, but as we learn each term, it will begin to make sense. Let’s begin.

Click to Continue

Basic Excel Training Bundle

 This is a quick reminder to let you know that enrollment for 3 course Basic Excel Training Bundle (12+ hours) at a special invitation price of INR 1,999  (instead of INR 19,999) will close in the next 2 days.

Key Highlights

• Anytime Anywhere Access
• Full Access to all 3 Video courses
• 12 Hands-on Projects
• Verifiable Certificates for all courses
• Lifetime Access, no limits 

This Basic Excel Training bundle consists of the following courses 

S. No	Course Name	Hours	Description
1	Basic Microsoft Excel Training Course	4	This is the first module of basic excel training. And we will start this module with a brief overview on Ribbons Quick Access Toolbar and Excel Help Function. Then, we will take a case study that we can use for showing you how Excel works. Then, you will understand what data entry is in MS Excel. Next, we will feed the data into the excel sheet for the case study. Then, we will talk about the calculations, formulas, formatting, and how you can update a calculation. Next, we will teach you about the percentages absolute references, conditional formatting, IF function, Count-IF, SUMIF, Charts & Graphs, sorts & filters, pivot tables, freeze & split, presentation, print, shortcuts, and finally,  common errors, You need to watch 28 videos in total to cover the module.
2	Excel Basic Training 2013 – Introduction MS Excel Basic Training Overview	4	This Basic Microsoft excel course online module is a little different than the earlier module. This training is based on MS Excel. We will start this module with a brief overview. Then, we will show you how to get started with MS Excel 2013. Then, we will take a case study and then would show you the data entry. Then, we will feed the data into the excel sheet for the case study. Then, we will talk about the calculations, formulas, formatting, and how you can update a calculation. Next, we will teach you about the percentages absolute references, conditional formatting, IF function, Count-IF, SUM-IF, Charts & Graphs, sorts & filters, pivot tables, freeze & split, presentation, print, shortcuts, and finally,  common errors, You need to watch 38 videos in total to cover the module.
3	Microsoft Excel 2016 – Beginners	4	This is another module that is an extension of the previous two basic microsoft excel training course modules. In this module, we will go in detail about Microsoft Excel 2016. And as you can expect, we will start with a brief overview of the MS Excel. Then, we will start with a case study so that showing you how things work would be easier. We will talk about calculations, formulas, updating a calculation, percentages & absolute references, conditional formatting, IF function, charts & graphs etc. You will also learn about common errors and shortcuts. This entire module will need you to watch 37 videos in total.
	Total Hours	12+

Explore 3 Courses Basic Excel Training Bundle (12+ Hours)

Who can do this course?

• Students
• Professionals from any background

Level - Appropriate for all levels 

Explore 3 Courses Basic Excel Training Bundle (12+ Hours)

Cheers,