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Technology Stocks : Vari-L (VARL)

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To: pat mudge who wrote (1258)10/21/1999 3:36:00 PM
From: Robert Sheldon  Read Replies (3) of 2702
 
Return on Equity is the measure of management's ability to add value for the stockholders of the company. In other words this is the return on “owners equity”. I feel that ROE is a better measure of how management is performing than EPS because it is much more difficult to manipulate. It is literally money that ends up in the company's coffers, not off in some accounting land.

The numbers I have summarized below are the return on equity given a specific period. For example if it is a year period, the net income at the end of that year is divided into the average of owners equity at the beginning and end of the year.

VARL ROavgE

1996 6.88%
1997 8.88%
1998 8.82%

1999 (trailing twelve months to Q1) 9.70%
1999 (trailing twelve months to Q2) 9.11%
1999 (trailing twelve months to Q3) 11.20%

1999 Q1 9.20%
1999 Q2 8.80% (a bit lower than TTM due to hiring expenses)
1999 Q3 10.80% (a bit lower than TTM due to hiring expenses)

Anyone see a pattern?

:-)
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