Is Frontier Communications Parent, Inc.'s (NASDAQ:FYBR) ROE Of 0.5% Concerning?
Is Frontier Communications Parent, Inc.'s (NASDAQ:FYBR) ROE Of 0.5% Concerning?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. By way of learning-by-doing, we'll look at ROE to gain a better understanding of Frontier Communications Parent, Inc. (NASDAQ:FYBR).
尽管一些投资者已经精通财务指标(帽子提示),但本文适用于那些想了解股本回报率(ROE)及其重要性的人。通过边干边学的方式,我们将研究投资回报率,以更好地了解前沿通信母公司(纳斯达克股票代码:FYBR)。
Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors' money. In other words, it is a profitability ratio which measures the rate of return on the capital provided by the company's shareholders.
股本回报率或投资回报率是对公司增值和管理投资者资金的有效性的考验。换句话说,它是衡量公司股东提供的资本回报率的盈利比率。
How To Calculate Return On Equity?
如何计算股本回报率?
The formula for ROE is:
ROE 的公式是:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
股本回报率 = 净利润(来自持续经营业务)÷ 股东权益
So, based on the above formula, the ROE for Frontier Communications Parent is:
因此,根据上述公式,边境通信母公司的投资回报率为:
0.5% = US$29m ÷ US$5.3b (Based on the trailing twelve months to December 2023).
0.5% = 2900万美元 ÷ 53亿美元(基于截至2023年12月的过去十二个月)。
The 'return' is the yearly profit. One way to conceptualize this is that for each $1 of shareholders' capital it has, the company made $0.01 in profit.
“回报” 是每年的利润。将其概念化的一种方法是,公司每拥有1美元的股东资本,就能获得0.01美元的利润。
Does Frontier Communications Parent Have A Good Return On Equity?
前沿通信母公司的股本回报率是否良好?
One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. If you look at the image below, you can see Frontier Communications Parent has a lower ROE than the average (9.2%) in the Telecom industry classification.
确定公司股本回报率是否不错的一种简单方法是将其与该行业的平均水平进行比较。但是,这种方法仅在粗略检查时有用,因为各公司在相同的行业分类中确实存在很大差异。如果你看下图,你会发现前沿通信母公司的投资回报率低于电信行业分类中的平均水平(9.2%)。
![roe](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240324/0-0e86a9493c6f89d29e598b741bb8aa94-0-96c448fba90a0104743dff4fd17de1d9.png/big)
That's not what we like to see. Although, we think that a lower ROE could still mean that a company has the opportunity to better its returns with the use of leverage, provided its existing debt levels are low. When a company has low ROE but high debt levels, we would be cautious as the risk involved is too high. To know the 4 risks we have identified for Frontier Communications Parent visit our risks dashboard for free.
这不是我们喜欢看到的。但是,我们认为,只要现有债务水平较低,较低的投资回报率仍可能意味着公司有机会通过使用杠杆提高回报。当一家公司的投资回报率低但债务水平高时,我们会谨慎行事,因为所涉及的风险太高。要了解我们为Frontier Communications Parent确定的4种风险,请免费访问我们的风险仪表板。
The Importance Of Debt To Return On Equity
债务对股本回报率的重要性
Most companies need money -- from somewhere -- to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the first and second cases, the ROE will reflect this use of cash for investment in the business. In the latter case, the use of debt will improve the returns, but will not change the equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.
大多数公司需要来自某个地方的资金来增加利润。这些现金可以来自留存收益、发行新股(股权)或债务。在第一和第二种情况下,投资回报率将反映现金用于企业投资的这种用途。在后一种情况下,债务的使用将提高回报,但不会改变股权。以这种方式,债务的使用将提高投资回报率,尽管该业务的核心经济学保持不变。
Combining Frontier Communications Parent's Debt And Its 0.5% Return On Equity
合并前沿通信母公司的债务及其0.5%的股本回报率
It's worth noting the high use of debt by Frontier Communications Parent, leading to its debt to equity ratio of 2.18. With a fairly low ROE, and significant use of debt, it's hard to get excited about this business at the moment. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.
值得注意的是,Frontier Communications母公司大量使用债务,导致其债务权益比率为2.18。由于投资回报率相当低,而且债务使用量很大,目前很难对这项业务感到兴奋。债务确实会带来额外的风险,因此只有当公司从中获得可观的回报时,债务才是真正值得的。
Conclusion
结论
Return on equity is a useful indicator of the ability of a business to generate profits and return them to shareholders. A company that can achieve a high return on equity without debt could be considered a high quality business. If two companies have the same ROE, then I would generally prefer the one with less debt.
股本回报率是衡量企业创造利润并将其返还给股东的能力的有用指标。能够在没有债务的情况下实现高股本回报率的公司可以被视为高质量的企业。如果两家公司的投资回报率相同,那么我通常更喜欢负债较少的公司。
But when a business is high quality, the market often bids it up to a price that reflects this. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. So you might want to check this FREE visualization of analyst forecasts for the company.
但是,当企业质量很高时,市场通常会以反映这一点的价格出价。重要的是要考虑其他因素,例如未来的利润增长,以及未来需要多少投资。因此,您可能需要查看该公司的分析师预测的免费可视化效果。
Of course Frontier Communications Parent may not be the best stock to buy. So you may wish to see this free collection of other companies that have high ROE and low debt.
当然,边境通讯母公司可能不是最值得买入的股票。因此,您可能希望看到这份免费收藏的其他投资回报率高、债务低的公司。
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
对这篇文章有反馈吗?对内容感到担忧?直接联系我们。 或者,给编辑团队 (at) simplywallst.com 发送电子邮件。
Simply Wall St的这篇文章本质上是笼统的。我们仅使用公正的方法根据历史数据和分析师的预测提供评论,我们的文章无意作为财务建议。它不构成买入或卖出任何股票的建议,也没有考虑到您的目标或财务状况。我们的目标是为您提供由基本数据驱动的长期重点分析。请注意,我们的分析可能不考虑最新的价格敏感型公司公告或定性材料。简而言之,华尔街没有持有任何上述股票的头寸。