Fintech’s (WSE:FTH) stock is up by a considerable 91% over the past week. Given that stock prices are usually aligned with a company’s financial performance in the long-term, we decided to study its financial indicators more closely to see if they had a hand to play in the recent price move. In this article, we decided to focus on Fintech’s ROE.
ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company’s shareholders.
How To Calculate Return On Equity?
The formula for ROE is:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity
So, based on the above formula, the ROE for Fintech is:
2.5% = zł159k ÷ zł6.4m (Based on the trailing twelve months to September 2022).
The ‘return’ is the yearly profit. So, this means that for every PLN1 of its shareholder’s investments, the company…