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Investment Q&A

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Q: Please help me out. One of the metrics I find very important is ROE or return on equity. When I look this up look this up on 5i’s site under profile I get an ROE of 128% however when I look at the April 25/24 report it shows 2%? The current Morningstar Quant Report shows 3.99%. So 1st. question is does 5i consider ROE to be an important metric?
Secondly how can I get an accurate measurement?
Thanks
Asked by Les on April 23, 2025
5i Research Answer:

Part of this discrepancy is due to different timeframes, and another part is due to different data providers. 

For example, the April 25, 2024 report was using LTM numbers from that time, whereas Morningstar Quant is using last-twelve month numbers as of today. On the other hand, the 5i number is from a different data provider and it's possible it is using adjusted net income, or an equity number that excludes/includes non-controlling interests. Our data sources currently show 3.99% as being the correct number. 

ROE works really well for financial companies that retain most of their capital to reinvest. Overall, we do like the metric, and we feel it is important to note that different industries will have different ROE ranges, and share buybacks will also negatively impact this metric.