Return on equity(ROE) focuses on equity holders only and gives an after-tax return on equity. The decline from 15.2% in 2015 to 4.3% in 2016 and -59.2% in 2017, shows an unusual sign in business which is terrifying. However, the longer-term trend in the ratios should be observed and if it continues to reduce further, counteractive management action needs to be taken.
Brief review of dividend and share performance (10%)
These ratios are especially relevant to investors, especially in quoted companies which have a verifiable share value. Investors are always interested in the dividend and share performance ratios. Especially when a company is quoted with verifiable share value.
The EPS in 2015 was 13,300cents which increased 128.41% in 2016 amounting to 30,378cent and currently decreased to -84,550 in 2017 dues to the dropping of earnings for ordinary shareholder. The better EPS is one which is high. Currently Hikma EPS is a disaster. Which is not good for investors?
The P/E ratio gives a measure of the market’s view of the value of the company in terms of its earnings. The P/E ratio in 2015 was 18.18 which increased by 56.62% in 2016 and drastically decreased to -3 in 2017. The current P/E ratio of -3 may tempt investors with a buying opportunity but the company share value would be low and the EPS is not encouraging. Actually, the company share value is higher when the P/E ratio is higher.
Dividends represent the earnings on a share. The amount per share has relatively increase by a cent all through the years, 32cents in 2015, 33 cents in 2016 and 34 cents in 2017. and the dividend yield shows shareholder the dividend value to his shares. The dividend yield in 2017 increased by 71.99% compared to 0.017 in 2016. The dividend cover shows a possible future growth of the dividend, currently the dividend cover is in a terrible mess, it has decline by -618% in 2017 from 49,727 to -257,589. A high dividend cover shows a strong possibility of increase in dividend.