Xero Net Income vs. Return On Equity
| XRO Stock | 168.92 0.26 0.15% |
Net Income | First Reported 2007-12-31 | Previous Quarter 53.7 M | Current Value 120.4 M | Quarterly Volatility 25.6 M |
For Xero profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Xero to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Xero utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Xero's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Xero over time as well as its relative position and ranking within its peers.
Xero |
Xero Return On Equity vs. Net Income Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Xero's current stock value. Our valuation model uses many indicators to compare Xero value to that of its competitors to determine the firm's financial worth. Xero is rated first in net income category among its peers. It is rated first in return on equity category among its peers . The ratio of Net Income to Return On Equity for Xero is about 1,152,204,270 . At this time, Xero's Net Income is comparatively stable compared to the past year. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Xero's earnings, one of the primary drivers of an investment's value.Xero Return On Equity vs. Net Income
Net income is the profit of a company for the reporting period, which is derived after taking revenues and gains and subtracting all expenses and losses. Net income is one of the most-watched numbers by money managers as well as individual investors.
Xero |
| = | 161.88 M |
Because income is reported on the Income Statement of a company and is measured in dollars some investors prefer to use Profit Margin, which measures income as a percentage of sales.
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Xero |
| = | 0.14 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Xero Return On Equity Comparison
Xero is currently under evaluation in return on equity category among its peers.
Xero Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Xero, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Xero will eventually generate negative long term returns. The profitability progress is the general direction of Xero's change in net profit over the period of time. It can combine multiple indicators of Xero, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -186 M | -176.7 M | |
| Operating Income | 255.5 M | 268.2 M | |
| Income Before Tax | 240.3 M | 252.3 M | |
| Total Other Income Expense Net | -15.2 M | -16 M | |
| Net Income | 161.9 M | 170 M | |
| Income Tax Expense | 80.1 M | 84.1 M | |
| Net Income From Continuing Ops | 160.2 M | 168.2 M | |
| Net Loss | -130.6 M | -124 M | |
| Interest Income | 61.9 M | 65 M | |
| Net Interest Income | 20.5 M | 21.5 M | |
| Change To Netincome | 51.1 M | 31 M |
Xero Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Xero. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Xero position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Xero's important profitability drivers and their relationship over time.
Use Xero in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Xero position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Xero will appreciate offsetting losses from the drop in the long position's value.Xero Pair Trading
Xero Pair Trading Analysis
The ability to find closely correlated positions to Xero could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Xero when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Xero - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Xero to buy it.
The correlation of Xero is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Xero moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Xero moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Xero can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Xero position
In addition to having Xero in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
Run Services Thematic Idea Now
Services
Companies involved in delivering services to business or consumers across different industries and sectors. The Services theme has 30 constituents at this time.
You can either use a buy-and-hold strategy to lock in the entire theme or actively trade it to take advantage of the short-term price volatility of individual constituents. Macroaxis can help you discover thousands of investment opportunities in different asset classes. In addition, you can partner with us for reliable portfolio optimization as you plan to utilize Services Theme or any other thematic opportunities.
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Additional Tools for Xero Stock Analysis
When running Xero's price analysis, check to measure Xero's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Xero is operating at the current time. Most of Xero's value examination focuses on studying past and present price action to predict the probability of Xero's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Xero's price. Additionally, you may evaluate how the addition of Xero to your portfolios can decrease your overall portfolio volatility.