ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Life Insurance Nepal's annualizedNet Income for the quarter that ended in Apr. 2024 was NPR124 Mil.
Life Insurance Nepal's average Total Assets over the quarter that ended in Apr. 2024 was NPR122,360 Mil. Therefore, Life Insurance Nepal's annualized ROA % for the quarter that ended in Apr. 2024 was 0.10%.
The historical rank and industry rank for Life Insurance Nepal's ROA % or its related term are showing as below:
XNEP:LICN'
s ROA % Range Over the Past 10 Years
Min: 0.7 Med: 24.47 Max: 44.37
Current: 0.75
During the past 13 years, Life Insurance Nepal's highest ROA % was 44.37%. The lowest was 0.70%. And the median was 24.47%.
XNEP:LICN's ROA % is ranked worse than 73.6% of 500
companies
in the Insurance industry
Industry Median: 2.19
vs XNEP:LICN: 0.75
* 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.
Competitive Comparison of Life Insurance Nepal's ROA %
For the Insurance - Life subindustry, Life Insurance Nepal's ROA %, along with its competitors' market caps and ROA % 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.
Life Insurance Nepal's ROA % Distribution in the Insurance Industry
For the Insurance industry and Financial Services sector, Life Insurance Nepal's ROA % distribution charts can be found below:
* The bar in red indicates where Life Insurance Nepal's ROA % falls into.
Life Insurance Nepal ROA % Calculation
Life Insurance Nepal's annualized ROA % for the fiscal year that ended in Jul. 2023 is calculated as:
* 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 ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is four times the quarterly (Apr. 2024) net income data.
ROA % is displayed in the 30-year financial page.
Life Insurance Nepal (XNEP:LICN) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is four times the quarterly (Apr. 2024) net income data. The Revenue data used here is four times the quarterly (Apr. 2024) revenue data.
* 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.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Life Insurance Nepal ROA % Related Terms
Thank you for viewing the detailed overview of Life Insurance Nepal's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.
Life Insurance Corp Nepal Ltd is operative in the field of financial services. A joint venture between Life Insurance Corporation of India and Vishal Group of Nepal, it is one of the largest capitalized insurance companies in Nepal. It offers a range of life insurance products such as endowment plans, child plans, money back plans, and services like a revival of a lapsed policy, policy loans, nominations, and bonuses to policyholders. The company's major source of revenue is through insurance premiums, which are received either by direct remittance of cheque or bank draft.
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