VMware (NYSE: VMW) stock is up a whopping 6.9% over the past month. Given the company’s impressive performance, we decided to take a closer look at its financial indicators, as a company’s long-term financial health usually determines market results. In particular, we decided to investigate VMware’s ROE in this article.
Return on equity, or ROE, is a key measure used to assess how efficiently a company’s management is using the company’s capital. Put simply, it is used to evaluate a company’s profitability in relation to its equity.
Check out our latest analysis for VMware
How do you calculate the return on equity?
The Formula for ROE is:
Return on Equity = Net Income (from continuing operations) ÷ Equity
So, based on the formula above, the ROE for VMware is:
23% = $ 2.1 billion ÷ $ 9.1 billion (based on the last twelve months through January 2021).
“Yield” refers to a company’s earnings over the past year. Another way to imagine this is that for everyone …