Breakdown Tables
Reinvestment returns and Financing
The third bottom table: how much of its earnings the company reinvests, and what that earns.
Definition
Reinvestment returns has three rows: the reinvestment rate (or retention rate for banks and insurers), the return on capital, and the spread of that return over the discount rate the Reference Value uses. The first two rows show a median over the last ten years the statements have (the heading reads, for example, 10Y median), plus a yearly Trend of up to ten years. A company that makes a loss or burns cash gets Financing instead: the latest year's burn (or payouts), equity raised and debt raised.
Why it matters
Growth is only worth paying for if the money put back into the business earns more than it costs. This table shows how much goes back in and whether it has paid.
How Standard Equity uses it
General companies: net capex, acquisitions and working capital against NOPAT. REITs: property purchases against FFO. Banks and insurers: earnings kept, and what they earn on book equity. A value that cannot be measured sensibly (fewer than three usable years) shows n/m. Companies with a captive finance arm are read like a bank, on net income and book equity.
The metric
| Category | Breakdown Tables |
|---|---|
| Unit | % |