Screener.in formula for ROE?

Does anyone know the formula screener uses for ROE.
If find that the values are very inflated.

Ex:
WelSpun India:

ROE is given as 30.25.
How is this possible when the site lists its
netprofit FY17: 357.56 Cr,
equity FY17: 2397.15 .
Going by this ROE ought to be: ~14%.

If we were to use FY16 equity: 1970.05 Cr, It ought to be ~18%.

Even if we used TTM:
Netprofit: 462.08
equity FY17: 2397.15
ROE: 19.

An ROE of 30.15 is baffling. Can someone please explain.
@ayushmit @pratyushmittal

1 Like

I have the same query. Can someone explain this?

I’m not sure someone has the answer. Unfortunately this is fatal to my screens.

@shubhams95 : I worked around the problem by creating a user ratio: Net Profit/(Capital + Reserves). This takes TTM netprofit. While capital and reserves comes from last reported. However, I don’t have a way to compute 3 years average ROE.

Can some suggest an alternative way: A user ratio that
would give me 3yrs average ROE?
@bheeshma @rvetri @calminvestor

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Hi mani

Screener is a terrific tool with a few drawbacks, like every other terrific
tool :blush:. I think even the RoCE calculation too is possibly not accurate
going by the text book RoCE definition.
I am not very specific about accuracy to the last decimal. I simply use the
readily available 3 year avg RoE and 5 year avg RoE in screener. What am
interested in is the floor for RoE. for example, i ignore any company below
15% RoE while screening for growth stocks. Offcourse , the past RoE is not
a criteria if i am looking for a turn around screen.

Vetri

Thanks for the reply!

Screener is a terrific tool

Absolutely.

I am not very specific about accuracy to the last decimal.

Actually I don’t need the accuracy either. Anything ballpark will do. But ROE of 17-20 vs 30 is a lot of difference. Its not really about the accuracy.

Its exactly for this kind of analysis that I need the ROE too. The readily avaible 3 year average RoE also suffers from the same problem. Infact, it gives 3year ROE for this company as 37.79 which is way off for a company thats just about 20 ROE.

I don’t quite understand why people seem to be thinking that I am looking for some specific version of ROE. I am not looking a for a standard or text book definition of ROE. Just that the current one looks way off. Any approximate one will do.

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Hi @m_mani

Yes, there seems to be a discrepancy. The Net Profit figure is correct - i checked it against with the TTM quarterly filings. It is 46280 lakhs. The rest is a mystery to me as well. Thanks for pointing out.

Best
Bheeshma

Thanks for reply. Any tips on how I could create a user ratio for 3yrs average ROE?

Guys Indo count limited also has the same issue. Company has reported roe of 17 but screener is showing roe of 30. Can anyone explain this please?

May be screener is using EBIT instead of PAT. From screener try EBIT = (PBT + Interest) instead of PAT. This is just a guess :slight_smile:

Thank you. Thats a good pointer. With EBIT, the ROE looks closer (30 reported vs 33 (Ebit calc)).

But ignoring the interest would heavily distort the ROE.

Yes, I agree. But there are so many variations of any financial ratio that it is best to calculate it first hand and then firmly believe in what you calculated rather than depend on any other source. It is hard ofcourse!!

As I mentioned earlier: I don’t think this is a question of whether a different variation of ROE is being used. I’d be ok with any variation. But in the end it has to be an ROE. If someone tossed up, say, the EPS under the title ROE, I guess people would point out there has been an error. One wouldn’t say “oh…well ROE has many flavours”.

The reason for this thread essential is to understand if screener is just using some other formula for ROE or if its a bug in the software that needs correction. (If its the latter its good to point it out for the benefit of others).

Sure, before we invest, we do study and calculate it ourselves. But that isn’t practical when you intend to use it to screen a universe of stocks. The ROE needs to be atleast roughly accurate.

Anyway, in this case, I’ve created a user ratio for my needs. I don’t have equivalent for the 3 year average, but I’m content with what I have. So we can consider this topic closed.

Hi. Is there a way to make a custom ratio in screener? I’ve checked and there’s no such provision. I can only do it in the Excel sheet the website provides.

@shubhams95

https://www.screener.in/ratios/

Hi
Recently I had the same issue(first searched valuepickr :laughing: ) and I just wrote to Screener team they have given a reply which is self explanatory. Hope this helps every screener user so I am posting it even after 1 year.

Hi Brijwanth,

Here is a list of optimizations that we do on Screener: https://www.screener.in/guides/optimizations/

ROE = PAT/ (average shareholders’ fund).

In this case, ROE = 285.62/ {(16+744+17+1374)/2}*100 = 26%

Hope this helps

Trade payable , Loans & Advances are showing up in screener site but these figures are not available in Excel. Atleast I couldn’t find them. Any idea where to find these figures in excel. TIA.