Datasets:

mteb
/

sts22-crosslingual-sts

+ {"source_url": "https://simplywall.st", "url": "https://simplywall.st/stocks/tw/software/gtsm-3570/otsuka-information-technology-shares/news/is-otsuka-information-technology-corp-s-gtsm3570-21-roe-better-than-average/", "title": "Is Otsuka Information Technology Corp.\u2019s (GTSM:3570) 21% ROE Better Than Average?", "top_image": "https://images.simplywall.st/company/AF7FFFDC-7AF4-46CD-A10F-26CF501A90DA/cover?size=main-header", "meta_img": "https://images.simplywall.st/company/AF7FFFDC-7AF4-46CD-A10F-26CF501A90DA/cover?size=main-header", "images": ["https://simplywall.st/news/wp-content/uploads/2016/05/NEWS-LOGO-1.png", "https://simplywall.st/news/wp-content/uploads/2019/02/warren-logo.png", "https://simplywall.st/images/simplywallst512.png", "https://images.simplywall.st/asset/company-ig/30887070-last-perf-1577804453000-dark/1577839427653", "https://simplywall.st/build/images/newbeginner/HiWarren2.png", "https://images.simplywall.st/company/AF7FFFDC-7AF4-46CD-A10F-26CF501A90DA/cover?size=main-header", "https://simplywall.st/images/simplywallst_square512white.png"], "movies": [], "text": "One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. To keep the lesson grounded in practicality, we\u2019ll use ROE to better understand Otsuka Information Technology Corp. (GTSM:3570).\n\nOtsuka Information Technology has a ROE of 21%, based on the last twelve months. Another way to think of that is that for every NT$1 worth of equity in the company, it was able to earn NT$0.21.\n\nCheck out our latest analysis for Otsuka Information Technology\n\nHow Do You Calculate Return On Equity?\n\nThe formula for ROE is:\n\nReturn on Equity = Net Profit (from continuing operations) \u00f7 Shareholders\u2019 Equity\n\nOr for Otsuka Information Technology:\n\n21% = NT$129m \u00f7 NT$630m (Based on the trailing twelve months to September 2019.)\n\nMost readers would understand what net profit is, but it\u2019s worth explaining the concept of shareholders\u2019 equity. It is the capital paid in by shareholders, plus any retained earnings. Shareholders\u2019 equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.\n\nWhat Does Return On Equity Mean?\n\nROE looks at the amount a company earns relative to the money it has kept within the business. The \u2018return\u2019 is the amount earned after tax over the last twelve months. A higher profit will lead to a higher ROE. So, as a general rule, a high ROE is a good thing. That means ROE can be used to compare two businesses.\n\nDoes Otsuka Information Technology Have A Good ROE?\n\nArguably the easiest way to assess company\u2019s ROE is to compare it with the average in its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification. As is clear from the image below, Otsuka Information Technology has a better ROE than the average (12%) in the Software industry.\n\nThat is a good sign. I usually take a closer look when a company has a better ROE than industry peers. For example you might check if insiders are buying shares.\n\nWhy You Should Consider Debt When Looking At ROE\n\nVirtually all companies need money to invest in the business, to grow profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the debt used for growth will improve returns, but won\u2019t affect the total equity. That will make the ROE look better than if no debt was used.\n\nCombining Otsuka Information Technology\u2019s Debt And Its 21% Return On Equity\n\nOne positive for shareholders is that Otsuka Information Technology does not have any net debt! Its ROE already suggests it is a good business, but the fact it has achieved this \u2014 and doesn\u2019t borrowings \u2014 makes it worthy of further consideration, in my view. At the end of the day, when a company has zero debt, it is in a better position to take future growth opportunities.\n\nIn Summary\n\nReturn on equity is one way we can compare the business quality of different companies. Companies that can achieve high returns on equity without too much debt are generally of good quality. If two companies have around the same level of debt to equity, and one has a higher ROE, I\u2019d generally prefer the one with higher ROE.\n\nBut when a business is high quality, the market often bids it up to a price that reflects this. Profit growth rates, versus the expectations reflected in the price of the stock, are a particularly important to consider. Check the past profit growth by Otsuka Information Technology by looking at this visualization of past earnings, revenue and cash flow.\n\nBut note: Otsuka Information Technology may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.\n\nIf you spot an error that warrants correction, please contact the editor at [email protected]. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.\n\n\n\nWe aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.", "keywords": [], "meta_keywords": [""], "tags": [], "authors": ["Simply Wall St"], "publish_date": "Wed Jan 1 11:33:27 2020", "summary": "", "article_html": "", "meta_description": "One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will...", "meta_lang": "en", "meta_favicon": "", "meta_data": {"viewport": "width=device-width, minimum-scale=1, maximum-scale=1, user-scalable=no", "contentType": "article", "article": {"section": "finance", "tag": "GTSM:3570", "published_time": "2020-01-01T11:33:27+11:00", "modified_time": "2020-01-01T11:33:27+11:00"}, "generator": "WordPress 5.2", "description": "One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will...", "promo": "One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will...", "og": {"title": "Is Otsuka Information Technology Corp.\u2019s (GTSM:3570) 21% ROE Better Than Average?", "type": "article", "url": "https://simplywall.st/stocks/tw/software/gtsm-3570/otsuka-information-technology-shares/news/is-otsuka-information-technology-corp-s-gtsm3570-21-roe-better-than-average/", "image": "https://images.simplywall.st/company/AF7FFFDC-7AF4-46CD-A10F-26CF501A90DA/cover?size=main-header", "site_name": "Simply Wall St", "locale": "en_US"}, "ticker": "GTSM:3570", "tickers": "GTSM:3570", "tags": "GTSM:3570", "author": "Simply Wall St", "pubdate": "2020-01-01T11:33:27+11:00"}, "canonical_link": "https://simplywall.st/stocks/tw/software/gtsm-3570/otsuka-information-technology-shares/news/is-otsuka-information-technology-corp-s-gtsm3570-21-roe-better-than-average/"}