DM.V Simply Wall St Wed., January 5, 2022, 5:08 a.m.·3 min Simply Wall St Wed., January 5, 2022, 5:08 a.m.·3 min
ROE can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Datametrex AI is:
24% = CA$7.6m ÷ CA$31m (Based on the trailing twelve months to September 2021).
The 'return' is the income the business earned over the last year. So, this means that for every CA$1 of its shareholder's investments, the company generates a profit of CA$0.24.
Conclusion
In total, we are pretty happy with Datametrex AI's performance. Specifically, we like that the company is reinvesting a huge chunk of its profits at a high rate of return. This of course has caused the company to see substantial growth in its earnings. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices.