Friday, February 10, 2012

Return on Equity for 16 Business Sectors

The graph below was created using Google’s graph tool.

The horizontal bar graph shows the return on equity (net income as a percentage of equity) less the cost of equity percentage (estimated by the using capital asset pricing model). The resulting percentage can then be used to compare the sector’s value-adding performance to other sectors based on the data used for the sectors.

The graph was generated using data at Aswath Damodaran’s website. Go to this website by clicking here. At the website, click the “Corporate Finance” button, then go down the page to “The Investment Decision: Measuring Return on Investments”, and then click “EVA and Equity EVA: By Sectors” to find the data that the graph is based on.
















Return on Equity less Cost of Equity (Value Added) for 16 Business Sectors

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