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Steiner Leisure Ltd  (NAS:STNR) ROE %: -39.90% (As of Sep. 2015)

Return on equity is calculated as Net Income attributable to Common Stockholders (Net Income minus the preferred dividends paid) divided by its Total Equity. Steiner Leisure Ltd's annualized net income attributable to common stockholders for the quarter that ended in Sep. 2015 was $-70.0 Mil. Steiner Leisure Ltd's Total Equity for the quarter that ended in Sep. 2015 was $175.3 Mil. Therefore, Steiner Leisure Ltd's annualized return on equity (ROE) for the quarter that ended in Sep. 2015 was -39.90%.


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.

Steiner Leisure Ltd Annual Data

Dec05 Dec06 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 18.39 17.36 15.80 13.16 -55.09

Steiner Leisure Ltd Quarterly Data

Dec10 Mar11 Jun11 Sep11 Dec11 Mar12 Jun12 Sep12 Dec12 Mar13 Jun13 Sep13 Dec13 Mar14 Jun14 Sep14 Dec14 Mar15 Jun15 Sep15
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 12.41 -265.21 18.78 20.09 -39.90

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

Steiner Leisure Ltd's annualized Return on Equity (ROE) for the fiscal year that ended in Dec. 2014 is calculated as

ROE=Net Income attributable to Common Stockholders (A: Dec. 2014 )/( (Total Equity (A: Dec. 2013 )+Total Equity (A: Dec. 2014 ))/ 2 )
=-158.097/( (401.069+172.895)/ 2 )
=-158.097/286.982
=-55.09 %

Steiner Leisure Ltd's annualized Return on Equity (ROE) for the quarter that ended in Sep. 2015 is calculated as

ROE=Net Income attributable to Common Stockholders (Q: Sep. 2015 )/( (Total Equity (Q: Jun. 2015 )+Total Equity (Q: Sep. 2015 ))/ 2 )
=-69.956/( (183.752+166.903)/ 2 )
=-69.956/175.3275
=-39.90 %

* 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 (Sep. 2015) 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: Sep. 2015 )
=Net Income attributable to Common Stockholders/Total Equity
=-69.956/175.3275
=(Net Income attributable to Common Stockholders< / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Equity)
=(-69.956 / 909.62)*(909.62 / 543.529)*(543.529 / 175.3275)
=Net Margin %*Asset Turnover*Leverage Ratio
=-7.69 %*1.6735*3.1001
=ROA %*Leverage Ratio
=-12.87 %*3.1001
=-39.90 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Sep. 2015) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Sep. 2015) 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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