This article is for anyone who would like to learn about Return On Equity (ROE) in order to better understand Carlsberg A / S.
Our data shows that Carlsberg has a return on equity of 15% for 2019. This means that for each share capital in the amount of DKK1, it generates a profit of 0.15 DKK.
See our latest analysis for Carlsberg
The return on equity formula is:
Return on equity = Net income ÷ Equity
Or for Carlsberg:
15% = ø5.9b ÷ ø47b (based on a twelve-month period until June 2019.)
It is easy to understand “net income” in this equation, but “equity” requires further explanation. This is all income held by the company, plus any capital paid by shareholders. Equity can be calculated by subtracting the total liabilities of the company from the total assets of the company.
Does Carlsberg have a good stock return?
Carlsberg has a higher return on investment than the average (11%) company in the beverage industry.
This is a good sign. We think that one high profitability is usually enough to justify further research of the company. For example, you can check if insiders are buying stocks.
Debt Carlsberg and its 15% ROE
Despite the fact that Carlsberg uses debt, the ratio of debt to equity of 0.53 is still low. The fact that he achieved a pretty good return on equity, having only a modest debt, suggests that the business should be added to your watchlist.