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Adobe Systems Inc  (NAS:ADBE) ROE %: 21.01% (As of Aug. 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. Adobe Systems Inc's annualized net income attributable to common stockholders for the quarter that ended in Aug. 2017 was $1,678 Mil. Adobe Systems Inc's Total Equity for the quarter that ended in Aug. 2017 was $7,987 Mil. Therefore, Adobe Systems Inc's annualized return on equity (ROE) for the quarter that ended in Aug. 2017 was 21.01%.

NAS:ADBE' s ROE % Range Over the Past 10 Years
Min: 3.98   Max: 20.8
Current: 20.8

3.98
20.8

During the past 13 years, Adobe Systems Inc's highest Return on Equity (ROE) was 20.80%. The lowest was 3.98%. And the median was 14.08%.

NAS:ADBE's ROE % is ranked higher than
83% of the 1866 Companies
in the Global industry.

( Industry Median: 6.42 vs. NAS:ADBE: 20.80 )

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.

Adobe Systems Inc Annual Data

Nov07 Nov08 Nov09 Nov10 Nov11 Nov12 Nov13 Nov14 Nov15 Nov16
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 13.38 4.33 3.98 9.14 16.20

Adobe Systems Inc Quarterly Data

Nov12 Feb13 May13 Aug13 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 May16 Aug16 Nov16 Feb17 May17 Aug17
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 14.91 21.74 21.23 19.46 21.01

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

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

ROE=Net Income attributable to Common Stockholders (A: Nov. 2016 )/( (Total Equity (A: Nov. 2015 )+Total Equity (A: Nov. 2016 ))/ 2 )
=1168.782/( (7001.58+7424.835)/ 2 )
=1168.782/7213.2075
=16.20 %

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

ROE=Net Income attributable to Common Stockholders (Q: Aug. 2017 )/( (Total Equity (Q: May. 2017 )+Total Equity (Q: Aug. 2017 ))/ 2 )
=1678.276/( (7803.998+8170.434)/ 2 )
=1678.276/7987.216
=21.01 %

* 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 (Aug. 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: Aug. 2017 )
=Net Income attributable to Common Stockholders/Total Equity
=1678.276/7987.216
=(Net Income attributable to Common Stockholders< / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Equity)
=(1678.276 / 7364.296)*(7364.296 / 13635.8575)*(13635.8575 / 7987.216)
=Net Margin %*Asset Turnover*Leverage Ratio
=22.79 %*0.5401*1.7072
=ROA %*Leverage Ratio
=12.31 %*1.7072
=21.01 %

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