Prosperity Resources (ASX:PSP) Return-on-Tangible-Equity: -569.09% (As of Jun. 2016)


What is Prosperity Resources Return-on-Tangible-Equity?

Prosperity Resources ASX:PSP Return-on-Tangible-Equity is -569.09% as of Jun. 2016. The stock has 4 warning signs investors should review.

Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Prosperity Resources's annualized net income for the quarter that ended in Jun. 2016 was A$-0.63 Mil. Prosperity Resources's average shareholder tangible equity for the quarter that ended in Jun. 2016 was A$0.11 Mil. Therefore, Prosperity Resources's annualized Return-on-Tangible-Equity for the quarter that ended in Jun. 2016 was -569.09%.

The historical rank and industry rank for Prosperity Resources's Return-on-Tangible-Equity or its related term are showing as below:

ASX:PSP's Return-on-Tangible-Equity is not ranked *
in the Metals & Mining industry.
Industry Median: -16.19
* Ranked among companies with meaningful Return-on-Tangible-Equity only.

Prosperity Resources  (ASX:PSP) Return-on-Tangible-Equity Explanation

Return-on-Tangible-Equity 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). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.

Be Aware

Net Income 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 Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity 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 Return-on-Tangible-Equitys can be extremely high.

Prosperity Resources Return-on-Tangible-Equity Related Terms

Prosperity Resources Return-on-Tangible-Equity Historical Data

* Premium members only.

The historical data trend for Prosperity Resources's Return-on-Tangible-Equity can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

Prosperity Resources Return-on-Tangible-Equity Chart

Prosperity Resources Annual Data
Trend Jun07 Jun08 Jun09 Jun10 Jun11 Jun12 Jun13 Jun14 Jun15 Jun16
Return-on-Tangible-Equity
Get a 7-Day Free Trial Premium Member Only Premium Member Only -41.11 -64.02 -265.35 0.00 -312.17

Prosperity Resources Semi-Annual Data
Dec06 Jun07 Dec07 Jun08 Dec08 Jun09 Dec09 Jun10 Dec10 Jun11 Dec11 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16
Return-on-Tangible-Equity Get a 7-Day Free Trial 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 -469.17 0.00 -135.78 -168.39 -569.09

Prosperity Resources Return-on-Tangible-Equity Competitor Comparison

For the Gold subindustry, Prosperity Resources's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity data, can be viewed below:

* 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. Note that "N/A" values will not show up in the chart.

Prosperity Resources Return-on-Tangible-Equity vs Metals & Mining Industry

For the Metals & Mining industry and Basic Materials sector, Prosperity Resources's Return-on-Tangible-Equity distribution charts can be found below:

* The bar in red indicates where Prosperity Resources's Return-on-Tangible-Equity falls into.


Prosperity Resources Return-on-Tangible-Equity Calculation

Prosperity Resources's annualized Return-on-Tangible-Equity for the fiscal year that ended in Jun. 2016 is calculated as

Return-on-Tangible-Equity=Net Income/( (Total Tangible Equity+Total Tangible Equity)/ count )
(A: Jun. 2016 )  (A: Jun. 2015 )(A: Jun. 2016 )
=Net Income/( (Total Stockholders Equity - Intangible Assets+Total Stockholders Equity - Intangible Assets )/ count )
(A: Jun. 2016 )  (A: Jun. 2015 )(A: Jun. 2016 )
=-0.59/( (0.408+-0.03 )/ 2 )
=-0.59/0.189
=-312.17 %

Prosperity Resources's annualized Return-on-Tangible-Equity for the quarter that ended in Jun. 2016 is calculated as

Return-on-Tangible-Equity=Net Income/( (Total Tangible Equity+Total Tangible Equity)/ count )
(Q: Jun. 2016 )  (Q: Dec. 2015 )(Q: Jun. 2016 )
=Net Income/( (Total Stockholders Equity - Intangible Assets+Total Stockholders Equity - Intangible Assets)/ count )
(Q: Jun. 2016 )  (Q: Dec. 2015 )(Q: Jun. 2016 )
=-0.626/( (0.25+-0.03)/ 2 )
=-0.626/0.11
=-569.09 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

In the calculation of annual Return-on-Tangible-Equity, the net income 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 data used here is two times the semi-annual (Jun. 2016) net income data. Return-on-Tangible-Equity is displayed in the 10-year financial page.

What does a Return-on-Tangible-Equity of -569.09% mean?
Prosperity Resources (ASX:PSP) has a Return-on-Tangible-Equity of -569.09% as of Jun. 2016. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Prosperity Resources and its competitors.
Is Prosperity Resources' Return-on-Tangible-Equity too high?
Prosperity Resources' current Return-on-Tangible-Equity is -569.09%.
How does Prosperity Resources' Return-on-Tangible-Equity compare to competitors?
Prosperity Resources' Return-on-Tangible-Equity of -569.09% can be compared against companies in the Metals & Mining industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for a Metals & Mining company?
A good Return-on-Tangible-Equity depends on the Metals & Mining industry context. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Prosperity Resources and its competitors. Prosperity Resources's current Return-on-Tangible-Equity is -569.09%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Prosperity Resources stock overvalued right now?
Prosperity Resources (ASX:PSP) has a current Return-on-Tangible-Equity of -569.09%. The current Return-on-Tangible-Equity is -569.09%. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Prosperity Resources (ASX:PSP), the current Return-on-Tangible-Equity is -569.09% as of Jun. 2016. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.

Prosperity Resources Business Description

Prosperity Resources Limited (PSP) is an exploration company for gold and iron ore in the Murchison greenstone belt of Western Australia and copper/gold in the Tennant Creek Goldfield of Northern Territory.