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The Valspar Corp  (NYSE:VAL) ROE %: 27.01% (As of Apr. 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. The Valspar Corp's annualized net income attributable to common stockholders for the quarter that ended in Apr. 2017 was $302 Mil. The Valspar Corp's Total Equity for the quarter that ended in Apr. 2017 was $1,119 Mil. Therefore, The Valspar Corp's annualized return on equity (ROE) for the quarter that ended in Apr. 2017 was 27.01%.

NYSE:VAL' s ROE % Range Over the Past 10 Years
Min: -9.75   Max: 42.82
Current: 31.42

-9.75
42.82

During the past 13 years, The Valspar Corp's highest Return on Equity (ROE) was 42.82%. The lowest was -9.75%. And the median was 19.09%.

NYSE:VAL's ROE % is ranked higher than
93% of the 1101 Companies
in the Global industry.

( Industry Median: 9.33 vs. NYSE:VAL: 31.42 )

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.

The Valspar Corp Annual Data

Oct07 Oct08 Oct09 Oct10 Oct11 Oct12 Oct13 Oct14 Oct15 Oct16
ROE % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 24.01 24.66 32.38 42.82 35.87

The Valspar Corp Quarterly Data

Jul12 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17
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 35.12 46.57 38.46 14.94 27.01

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

The Valspar Corp's annualized Return on Equity (ROE) for the fiscal year that ended in Oct. 2016 is calculated as

ROE=Net Income attributable to Common Stockholders (A: Oct. 2016 )/( (Total Equity (A: Oct. 2015 )+Total Equity (A: Oct. 2016 ))/ 2 )
=353.04/( (855.009+1113.423)/ 2 )
=353.04/984.216
=35.87 %

The Valspar Corp's annualized Return on Equity (ROE) for the quarter that ended in Apr. 2017 is calculated as

ROE=Net Income attributable to Common Stockholders (Q: Apr. 2017 )/( (Total Equity (Q: Jan. 2017 )+Total Equity (Q: Apr. 2017 ))/ 2 )
=302.188/( (1068.361+1169.524)/ 2 )
=302.188/1118.9425
=27.01 %

* 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 (Apr. 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 three-step DuPont Analysis:

ROE %(Q: Apr. 2017 )
=Net Income attributable to Common Stockholders/Total Equity
=302.188/1118.9425
=(Net Income attributable to Common Stockholders / Revenue )*(Revenue / Total Assets)*(Total Assets / Total Equity)
=(302.188 / 4383.332)*(4383.332 / 4340.648)*(4340.648 / 1118.9425)
=Net Margin %*Asset Turnover*Equity Multiplier
=6.89 %*1.0098*3.8792
=ROA %*Equity Multiplier
=6.96 %*3.8792
=27.01 %

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.

The factors that affect a company's Return on Equity (ROE) can also be illustrated with the five-step DuPont Analysis:

ROE %(Q: Apr. 2017 )
=Net Income to Common Stockholder/Total Equity
=302.188/1118.9425
=(NI to Com. Stockholder/Pre-Tax Income) * (Pre-Tax Income/Operating Income) * (Operating Income/Revenue) * (Revenue/Total Assets) * (Total Assets/Total Equity)
= (302.188 / 429.36) * (429.36 / 512.152) * (512.152 / 4383.332) * (4383.332 / 4340.648) * (4340.648 / 1118.9425)
= Tax Burden * Interest Burden * Operating Margin % * Asset Turnover * Equity Multiplier
= 0.7038 * 0.8383 * 11.68 % * 1.0098 * 3.8792
=27.01 %

Note: The net income attributable to common stockholders data used here is four times the quarterly (Apr. 2017) net income attributable to common stockholders data. The Revenue data used here is four times the quarterly (Apr. 2017) revenue data. The same rule applies to Pre-Tax Income and Operating Income.

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


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 equity multiplier 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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