In today’s briefing:
- What the Two ROEs Mean
What the Two ROEs Mean
- Although Net Profit Margin has been the most highly correlated of 3 components of ROE, improvements in Asset Turnover and Equity Ratio driven by share buybacks are now drawing attention.
- In FY2026, once the temporary impact of U.S. tariffs has run its course, companies engaged in global business are expected to more aggressively repurchase their own shares alongside recovering profits.
- The ROE derived from the aggregate profits and net assets of all companies differs by over 1% from the average ROE of individual companies, and this gap won’t be narrow.
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