With its stock down 11% over the past month, it is easy to disregard Shanghai Chlor-Alkali Chemical (SHSE:600618). However, stock prices are usually driven by a company’s financials over the long term, which in this case look pretty respectable. Specifically, we decided to study Shanghai Chlor-Alkali Chemical’s ROE in this article.
Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In simpler terms, it measures the profitability of a company in relation to shareholder’s equity.
See our latest analysis for Shanghai Chlor-Alkali Chemical
How Do You Calculate Return On Equity?
ROE can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity
So, based on the above formula, the ROE for Shanghai Chlor-Alkali Chemical is:
11% = CN¥937m ÷ CN¥8.5b (Based on…
