1.14(2.99%) Volume: 864,596 11:08PM EST| Market Cap : 2.68 B | Enterprise Value : 4.84 B | P/E (TTM) : 7.75 | P/B : 1.25 |
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Return on tangible equity is calculated as Net Income attributable to Common Stockholders divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Spirit Airlines's annualized net income attributable to common stockholders for the quarter that ended in Sep. 2019 was $334 Mil. Spirit Airlines's average shareholder tangible equity for the quarter that ended in Sep. 2019 was $2,138 Mil. Therefore, Spirit Airlines's annualized return on tangible equity (ROTE) for the quarter that ended in Sep. 2019 was 15.62 %%.
During the past 11 years, Spirit Airlines's highest Return on Tangible Equity (ROTE) was 42.28%. The lowest was 8.44%. And the median was 25.81%.
* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.
| Spirit Airlines Quarterly Data | ||||||||||||||||||||
| Dec14 | Mar15 | Jun15 | Sep15 | Dec15 | Mar16 | Jun16 | Sep16 | Dec16 | Mar17 | Jun17 | Sep17 | Dec17 | Mar18 | Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | |
| Return-on-Tangible-Equity |
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21.86 | 19.55 | 11.48 | 22.49 | 15.62 |
* The bar in red indicates where Spirit Airlines's Return-on-Tangible-Equity falls into.
Spirit Airlines's annualized Return on Tangible Equity (ROTE) for the fiscal year that ended in Dec. 2018 is calculated as
| ROTE | = | Net Income attributable to Common Stockholders | / | ( (Total Tangible Equity | + | Total Tangible Equity) | / 2 ) |
| (A: Dec. 2018 ) | (A: Dec. 2017 ) | (A: Dec. 2018 ) | |||||
| = | Net Income attributable to Common Stockholders | / | ( (Total Stockholders Equity - Intangible Assets | + | Total Stockholders Equity - Intangible Assets ) | / 2 ) | |
| (A: Dec. 2018 ) | (A: Dec. 2017 ) | (A: Dec. 2018 ) | |||||
| = | 155.749 | / | ( (1762.574 | + | 1928.504 ) | / 2 ) | |
| = | 155.749 | / | 1845.539 | ||||
| = | 8.44 % % |
Spirit Airlines's annualized Return on Tangible Equity (ROTE) for the quarter that ended in Sep. 2019 is calculated as
| ROTE | = | Net Income attributable to Common Stockholders | / | ( (Total Tangible Equity | + | Total Tangible Equity) | / 2 ) |
| (Q: Sep. 2019 ) | (Q: Jun. 2019 ) | (Q: Sep. 2019 ) | |||||
| = | Net Income attributable to Common Stockholders | / | ( (Total Stockholders Equity - Intangible Assets | + | Total Stockholders Equity - Intangible Assets) | / 2 ) | |
| (Q: Sep. 2019 ) | (Q: Jun. 2019 ) | (Q: Sep. 2019 ) | |||||
| = | 333.856 | / | ( (2095.027 | + | 2180.087) | / 2 ) | |
| = | 333.856 | / | 2137.557 | ||||
| = | 15.62 % % |
* 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 tangible equity, the net income attributable to common stockholders of the last fiscal year and the average total shareholder tangible 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. 2019) net income attributable to common stockholders data. Return on Equity is displayed in the 10-year financial page.
Return on Tangible Equity (ROTE) measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). ROTE shows how well a company uses investment funds to generate earnings growth. ROTEs between 15% and 20% are considered desirable.
Net income attributable to common stockholders is used.
Because a company can increase its return on tangible equity by having more financial leverage, it is important to watch the leverage ratio when investing in high ROTE companies. Like Return-on-Tangible-Asset, ROTE 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 ROTEs can be extremely high.
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- Fool 2019-12-07 12:13:00
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