Fibre Broadband Shares

[Snoopy]

ROE or 'Return on Equity' is calculated as follows:

ROE = Adjusted Net Profit / (Shareholder Equity - Equity Adjusted Asset Revaluations)

FY2016: -$8.252m / [$100.799m - (0.2944x $11.838m)] = -8.48%

FY2017: -$8,535m / [$138.888m - (0.3270x $11.838m)]= -6.32%

FY2018: -$3.768m / [$212.952m - 0.4068 x ($11.838m + $24.854m)] = -1.90%

FY2019: +$10.841m / [$227.988m - 0.4157x ($11.838m + $24.854m)] = +5.10%

FY2020: +$11.321m / [$311.323m - 0.4690x ($11.838m + $24.854m +$66.424m)] = +4.31%


Notes

1/ I have decided to adjust shareholder equity by removing the equity funded component of all historic asset revaluations. Asset revaluations are beneficial for shareholders. But since no shareholder funds were outlaid to obtain these revaluations (a good thing), it will artificially reduce the return on 'paid for' company equity - if I include the revaluations in my ROE calculations. To calculate the adjustment to make to:

1/ the shareholder equity for all historically revalued assets,
2/ for each year

I have taken the cumulative historically revalued totals and multiplied each total by the equity ratio of that year.

Although we are going in the right direction, at no time in the last five years has Enable got even close to our return on equity target.

Conclusion: Fail Test



SNOOPY