The return on equity is the valuation method used in accounting which is employed for computing the profit that a company is able to earn which is compared with the total shareholder equity invested in the business. The ROE is made up of three main elements which pertain to profitability, asset management as well as financial leverage.The companies that have been selected for the analysis of their ROE pertain to the entertainment industry.
The ROE of the Walt Disney Company for the year 2007 is 14.1. The industry ROE is at 11.8 for the same period. This indicates that the ROE for the company is higher than the industry average. The ROE of the Time Warner Inc for the year 2007 is 5.9. The industry ROE is at 11.8 for the same period. This indicates that the company has a worse off ROE than the industry, as well as the ROE of the Walt Disney Company.
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