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Apple Inc  (NAS:AAPL) ROE %: 26.17% (As of Jun. 2017)

Return on equity is calculated as Net Income attributable to Common Stockholders (Net Income minus the preferred dividends paid) divided by its Total Equity. Apple Inc's annualized net income attributable to common stockholders for the quarter that ended in Jun. 2017 was $34,868 Mil. Apple Inc's Total Equity for the quarter that ended in Jun. 2017 was $133,254 Mil. Therefore, Apple Inc's annualized return on equity (ROE) for the quarter that ended in Jun. 2017 was 26.17%.

NAS:AAPL' s ROE % Range Over the Past 10 Years
Min: 28.51   Max: 46.25
Current: 35.68

28.51
46.25

During the past 13 years, Apple Inc's highest Return on Equity (ROE) was 46.25%. The lowest was 28.51%. And the median was 34.45%.

NAS:AAPL's ROE % is ranked higher than
97% of the 2240 Companies
in the Global industry.

( Industry Median: 6.43 vs. NAS:AAPL: 35.68 )

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Apple Inc Annual Data

Sep07 Sep08 Sep09 Sep10 Sep11 Sep12 Sep13 Sep14 Sep15 Sep16
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 42.84 30.64 33.61 46.25 36.90

Apple Inc Quarterly Data

Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15 Dec15 Mar16 Jun16 Sep16 Dec16 Mar17 Jun17
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 24.27 28.30 54.91 33.11 26.17

Competitive Comparison
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap.


Calculation

Apple Inc's annualized Return on Equity (ROE) for the fiscal year that ended in Sep. 2016 is calculated as

ROE=Net Income attributable to Common Stockholders (A: Sep. 2016 )/( (Total Equity (A: Sep. 2015 )+Total Equity (A: Sep. 2016 ))/ 2 )
=45687/( (119355+128249)/ 2 )
=45687/123802
=36.90 %

Apple Inc's annualized Return on Equity (ROE) for the quarter that ended in Jun. 2017 is calculated as

ROE=Net Income attributable to Common Stockholders (Q: Jun. 2017 )/( (Total Equity (Q: Mar. 2017 )+Total Equity (Q: Jun. 2017 ))/ 2 )
=34868/( (134082+132425)/ 2 )
=34868/133253.5
=26.17 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

In the calculation of annual return on equity, the net income attributable to common stockholders of the last fiscal year and the average total shareholder equity over the fiscal year are used. In calculating the quarterly data, the net income attributable to common stockholders data used here is four times the quarterly (Jun. 2017) net income attributable to common stockholders data. Return on Equity is displayed in the 30-year financial page.


Explanation

Return on Equity (ROE) measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are considered desirable.

The factors that affect a company's Return on Equity (ROE) can be illustrated with the Du Pont Formula:

ROE %(Q: Jun. 2017 )
=Net Income attributable to Common Stockholders/Total Equity
=34868/133253.5
=(Net Income attributable to Common Stockholders< / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Equity)
=(34868 / 181632)*(181632 / 339852.5)*(339852.5 / 133253.5)
=Net Margin %*Asset Turnover*Leverage Ratio
=19.2 %*0.5344*2.5504
=ROA %*Leverage Ratio
=10.26 %*2.5504
=26.17 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Jun. 2017) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Jun. 2017) revenue data.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

With this breakdown, it is clear that if a company grows its Net Profit Margin, its Asset Turnover, or its Leverage, it can grow its return on equity.


Be Aware

Net income attributable to common stockholders is used.

Because a company can increase its return on equity by having more financial leverage, it is important to watch the leverage ratio when investing in high ROE companies. Like ROA %, ROE is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Asset light businesses require very few assets to generate very high earnings. Their ROEs can be extremely high.


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