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Return on equity and margin checker
Paste several years of a company's accounts. Get return on equity, margins and a one-dollar test, each marked pass or fail.
Return on equity and margin checker is a free AI skill for the job "Handle money and investing". Give the instructions to an AI assistant that supports the required files and tools, then review its output.
Free · No account · Made by AI Blocks · Level: advanced · Thinking: high
What it does
Profit per share goes up at nearly any company that keeps its profits, even when the kept money earns almost nothing. It tells you very little about how good the business is. This skill asks better questions. How much does the business earn on the money already in it? Does that return survive once you take away debt and one-off gains? How do its margins compare with rivals, and does it keep announcing cost cuts? And over several years, did each dollar of profit it kept add at least a dollar of value? Each of the three tests ends as pass, fail or unknown, with the figures behind it. It gives no buy or sell calls and marks every missing figure.
You give it
- Four or five years of operating profit, equity, debt, sales, dividends and buybacks
- Market value of the company at the start and end of the period
- Figures for two or three rivals (optional)
- Earlier findings on the business (optional)
You get
- Return on equity by year and on average, on a clean basis
- Return on total capital, so debt cannot hide
- A margin comparison and a note on cost habits
- The one-dollar test with its figures
- Pass, fail or unknown for each of the three tests
Use it when
- You are checking whether a business earns good money on the capital in it.
- A company shows rising profit per share and you want to know if that means anything.
- You are comparing two businesses and one shows a higher return that may come from debt.
How to use it
- Start a chat with the skill. Open it if you added it to your AI, or copy it and paste it in.
- Paste the figures from the accounts, or attach a spreadsheet.
- Add rival figures if you have them, and the company's market value at the start and end.
- Read the return on total capital next to the return on equity.
- Take the calls to "Business tenet scorecard writer".