Growth (ROE x Retention rate)

Q & AGrowth (ROE x Retention rate)
Noreman Yasin asked 2 years ago

Hi Peter,
 
Just want to confirm.
 
Growth (ROE x Retention rate) weather  ROEused (1 – Dividen Payaout Ratio %) or Retention Rate (How to get this??)
 
Pls guide.
 

Financial Year
31-03-2009
31-03-2010
31-03-2011
31-03-2012
31-03-2013
31-03-2014
31-03-2015
31-03-2016
31-03-2017
31-03-2018

Status
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual
Actual

Sales/Revenue
174.73
195.74
256.98
414.83
423.29
412.77
619.27
1015.35
1943.56
2104.51

Gross Income
28.51
38.12
51.74
69.06
75.38
62.64
87.06
155.47
195.8
232.38

EBIT (Operating Income)
9.78
16.31
28.44
42.75
46.97
33.77
52.9
93.56
127.12
151.45

Pretax Income
5.13
18.06
31.93
49.65
53.79
39.76
55.8
101.37
138.51
162.29

Net Income
2.93
13.4
26.24
36.84
39.55
29.32
42.32
81.48
103.32
127.1

Average Income (3 years)
 
 
14.19
 
 
 
 
 
103.97
 

Growth Rate ( average 3 years)
 
 
 
 
 
 
 
 
 
39.36%

Growth Rate
 
 
 
 
 
 
 
 
 
52.03%

 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

 
 
 
 
 
 
 
 
 
 
 

Total Current Assets
75.72
99.72
126.77
186.6
190.75
220.58
382.89
360.64
854.16
711.76

Total Assets
159.38
177.91
211.07
263.4
268.38
302.97
564.69
555.59
1053.1
914.6

Total Current Liabilities
21.89
30.07
45.84
76.54
62.14
74.91
398.1
185.68
571.96
338.5

Total Liabilities
29
37.12
53.01
83.47
69.53
82.89
412.67
217.34
597.46
357.28

Total Shareholders’ Equity
130.39
140.8
158.06
179.94
198.85
220.07
152.02
338.24
455.64
555.65

Total Equity
130.39
140.8
158.06
179.94
198.85
220.07
152.02
338.24
455.64
557.32

Liabilities & Stockholders’ Equity – Total
159.38
177.91
211.07
263.4
268.38
302.97
564.69
555.59
1053.1
914.6

 
 
 
 
 
 
 
 
 
 
 

ROE
2.25%
9.88%
17.56%
21.80%
20.88%
14.00%
22.75%
33.24%
26.03%
25.09%

Average ROE
 
 
 
 
 
 
 
 
 
19.35%

Quartile 1 ROE
 
 
 
 
 
 
 
 
 
14.89%

 

VALUATION (SKPRESS)
 
 
 
 

Dividen Payout Ratio
47.00%
 
 
 

ROE used
25.09%
 
 
 

Growth -g (ROE x retention rate)
13.30%
,retention ratio= 1-
53.00%

k = required return
15%
 
 
 

V/B = (ROE-g)/(k-g)
                                  6.939
 
 
 

Equity
557.32
 
 
 

Value
                            3,867.19
 
 
 

1 Answers
KCLau Staff answered 2 years ago

Please send in your spreadsheet for review on the webinar.