Return on Common Equity is defined as:
Return on Common Equity = Net Income To Common / Average Total Common Equity
Return on Common Equity for Villeroy & Boch is calculated as follows:
Net Income [ 5.9 M ]
(/) Average Equity over Period [ 374.4 M ]
(=) Return on Common Equity [ 1.6% ]
The tables below summarizes the trend in Villeroy & Boch’s return on common equity over the last five years:
| Fiscal Year |
Net Income |
Average Common Equity |
Return on Common Equity |
| 2020-12-31 |
22.6 M |
247.3 M |
9.1% |
| 2021-12-31 |
60.2 M |
275.1 M |
21.9% |
| 2022-12-31 |
71.2 M |
336 M |
21.2% |
| 2023-12-31 |
60.7 M |
376.5 M |
16.1% |
| 2024-12-31 |
5.9 M |
374.4 M |
1.6% |
Return on equity represents the percentage return a company generates on the money shareholders have invested.
The Net Income used in
the numerator is often adjusted for one-time and non-recurring items to present a clearer view of future earnings. Since income is earned over the course of a year, we average book value of Common Equity at the start and end of the year for the denominator.
In general, a higher return on equity suggests management is utilizing the capital invested by shareholders efficiently.
Click the link below to download a spreadsheet with an example Name calculation for Villeroy & Boch AG Pref below: