Inside the Numbers

Return on equity is a measure of profitability that’s determined by dividing annual net profit by total shareholder equity. This list looks across two years and then takes an average. Each year’s return is shown in the chart.

This can be a valuable gauge of how well a company is investing its capital. Sales and income figures provide a sense of the size of the company’s operations.

Because ROE figures tend to be distorted for companies with small amounts of shareholder equity, we’ve limited this listing to companies with $25 million or more in shareholder equity.

Return on Equity

Companies ranked by income as a percentage of average common shareholders’ equity over two years.

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‘95 ’95 ’94 sales net income Rank Rank Company ($ millions) ($ millions) 1 AG Associates Inc. 82 11 2 WFS Financial Inc. 135 30 3 Creative Computers Inc. 421 6 4 Oakley Inc. 173 32 5 Tarrant Apparel Group 205 6 6 Mylex Corp. 100 13 7 Cadence Design Systems 596 109 8 6 Safeway Inc. 16,648 363 9 3 Callaway Golf Co. 569 100 10 13 WD-40 Co. 120 20 11 7 Oracle Corp. 3,777 519 12 17 Health Systems Intl. Inc 2,732 90 13 9 Cisco Systems Inc. 2,668 634 14 76 Teledyne Inc. 2,583 135 15 43 Cohu Inc. 197 28 16 18 Phoenix Technologies Ltd. 53 9 17 Tylan General 85 7 18 3Com Corp. 2,069 198 19 27 Linear Technology 364 128 20 ENCAD Inc. 66 8 21 Ascend Communications 150 31 22 4 GaSonics Intl Corp. 115 18 23 C-Cube Microsystems Inc. 125 25 24 38 Applied Materials 3,596 560 25 35 Broderbund Software Inc. 192 49 26 32 Xilinx Inc. 561 101 27 54 Maxim Integrated Products 345 76 28 22 Amgen Inc. 2,008 573 29 2 Herbalife Intl. 489 20 30 Chips & Technologies Inc 146 23 31 82 Altera Corp. 464 103 32 56 Novellus Systems Inc. 413 91 33 Network Equipment Techs. 339 31 34 Mattson Technology Inc. 55 10 35 36 Credence Systems Corp. 202 35 36 14 Charles Schwab Corp. 1,570 181 37 Western Digital Corp. 2,630 91 38 Spectrian Corp. 71 6 39 21 Intel Corp. 17,289 3,571 40 Oak Technology Inc. 271 63 41 58 Tencor Instruments 369 73 42 29 StrataCom Inc. 362 57 43 48 Lam Research Corp. 1,153 133 44 19 Informix Corp. 765 102 45 Cidco Inc. 194 23 46 TCSI Corp. 55 8 47 40 LSI Logic Corp. 1,268 241 48 26 Franklin Resources 864 280 49 77 Wells Fargo & Co. 4,085 1,063 50 Siliconix Inc. 269 29 51 49 Integrated Device Tech. 645 123 52 Electroglas Inc. 187 41 53 23 Gymboree Corp. 259 26 54 59 Mattel Inc. 3,681 361 55 45 Fair, Isaac and Co. 130 15 56 MDL Information Systems 59 9 57 Maxicare Health Plans 477 28 58 SunAmerica Inc. 958 214 59 50 Aspect Telecommunications 222 27 60 Incomnet Inc. 87 1 61 11 Bay Networks Inc. 1,912 203 62 Macromedia 112 25 63 71 Electronics For Imaging 190 37 64 44 Viking Office Products 921 53 65 34 Gap Inc. 4,395 354 66 Superior Industries Intl. 509 46 67 McAfee Associates Inc. 90 15 68 60 Watson Pharmaceuticals 153 48 69 Adaptec Inc. 594 92 70 3-D Systems Corp. 63 9 71 Aames Financial Corp. 81 18 72 Newhall Land & Farming 183 33 73 Genus Inc. 100 19 74 Mentor Corp. 172 22 75 Varian Associates Inc. 1,508 117 76 20 Electronic Arts 521 45 77 KLA Instruments Corp. 639 113 78 Komag Inc. 560 130 79 33 Pyxis Corp. 203 35 80 75 Atmel Corp. 634 114 81 Tekelec 75 6 82 PeopleSoft Inc. 228 29 83 Leasing Solutions 81 6 84 Cypress Semiconductor 643 128 85 5 Alliance Semiconductor 201 11 86 ThermoTrex Corp. 130 50 87 95 Seagate Technology Inc. 5,493 394 88 62 Clorox Co. 2,140 216 89 46 Boole & Babbage Inc. 156 15 90 91 Walt Disney Co. 12,628 1,394 91 Pacific Telesis Group 9,042 1,048 92 98 Health Care Property 105 83 93 Sun Microsystems Inc. 6,725 482 94 Read-Rite Corp. 1,099 135 95 NetManage Inc. 120 23 96 99 Hewlett-Packard Co. 33,503 2,621 97 69 Rockwell Intl. 13,481 791 98 85 Day Runner Inc. 126 11 99 73 Solectron Corp. 2,435 98 100 51 PacifiCare Health Systems 3,974 116

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Return on Equity (contd.)

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‘94 ’95 ’94 return on return on Rank Rank Company avg. equity avg. equity 1 AG Associates Inc. 306 46 2 WFS Financial Inc. 211 60 3 Creative Computers Inc. 225 23 4 Oakley Inc. 25 126 5 Tarrant Apparel Group 67 53 6 Mylex Corp. 78 35 7 Cadence Design Systems 30 75 8 6 Safeway Inc. 50 51 9 3 Callaway Golf Co. 50 49 10 13 WD-40 Co. 51 46 11 7 Oracle Corp. 48 42 12 17 Health Systems Int’l. Inc 47 37 13 9 Cisco Systems Inc. 39 45 14 76 Teledyne Inc. 42 37 15 43 Cohu Inc. 27 47 16 18 Phoenix Technologies Ltd. 54 20 17 Tylan General 46 28 18 3Com Corp. 37 34 19 27 Linear Technology 31 39 20 ENCAD Inc. 37 34 21 Ascend Communications 41 29 22 4 GaSonics Intl. Corp. 36 32 23 C-Cube Microsystems Inc. 25 41 24 38 Applied Materials 28 37 25 35 Broderbund Software Inc. 26 39 26 32 Xilinx Inc. 29 36 27 54 Maxim Integrated Products 23 41 28 22 Amgen Inc. 26 38 29 2 Herbalife International 46 18 30 Chips & Technologies Inc 25 39 31 82 Altera Corp. 15 49 32 56 Novellus Systems Inc. 27 35 33 Network Equipment Techs. 37 25 34 Mattson Technology Inc. 37 25 35 36 Credence Systems Corp. 32 30 36 14 Charles Schwab Corp. 30 31 37 Western Digital Corp. 41 20 38 Spectrian Corp. 47 15 39 21 Intel Corp. 29 33 40 Oak Technology Inc. 19 41 41 58 Tencor Instruments 30 30 42 29 StrataCom Inc. 30 29 43 48 Lam Research Corp. 26 32 44 19 Informix Corp. 29 29 45 Cidco Inc. 31 25 46 TCSI Corp 27 29 47 40 LSI Logic Corp. 27 29 48 26 Franklin Resources 29 26 49 77 Wells Fargo & Co. 23 30 50 Siliconix Inc. 18 36 51 49 Integrated Device Tech. 27 28 52 Electroglas Inc. 24 30 53 23 Gymboree Corp. 29 26 54 59 Mattel Inc. 24 30 55 45 Fair, Isaac and Co. 26 27 56 MDL Information Systems 16 36 57 Maxicare Health Plans 14 38 58 SunAmerica Inc. 27 25 59 50 Aspect Telecommunications 24 27 60 Incomnet Inc. 47 4 61 11 Bay Networks Inc. 26 25 62 Macromedia 19 32 63 71 Electronics For Imaging 22 29 64 44 Viking Office Products 25 25 65 34 Gap Inc. 26 25 66 Superior Industries Intl. 30 20 67 McAfee Associates Inc. 10 40 68 60 Watson Pharmaceuticals 24 26 69 Adaptec Inc. 27 23 70 3-D Systems Corp. 27 23 71 Aames Financial Corp. 22 27 72 Newhall Land & Farming 18 31 73 Genus Inc. 12 36 74 Mentor Corp. 25 24 75 Varian Associates Inc. 22 26 76 20 Electronic Arts 29 18 77 KLA Instruments Corp. 19 29 78 Komag Inc. 18 29 79 33 Pyxis Corp. 26 21 80 75 Atmel Corp. 21 25 81 Tekelec 31 15 82 PeopleSoft Inc. 18 28 83 Leasing Solutions 23 22 84 Cypress Semiconductor 15 30 85 5 Alliance Semiconductor 40 5 86 ThermoTrex Corp. 9 35 87 95 Seagate Technology Inc. 19 25 88 62 Clorox Co. 21 23 89 46 Boole & Babbage Inc. 20 24 90 91 Walt Disney Co. 22 22 91 Pacific Telesis Group 20 23 92 98 Health Care Property 19 24 93 Sun Microsystems Inc. 18 25 94 Read-Rite Corp. 18 24 95 NetManage Inc. 21 22 96 99 Hewlett-Packard Co. 19 23 97 69 Rockwell Intl. 20 21 98 85 Day Runner Inc. 19 23 99 73 Solectron Corp. 20 21 100 51 PacifiCare Health Systems 23 18

2-year avg. return Rank on equity 1 176 2 135 3 124 4 75 5 60 6 57 7 52 8 51 9 50 10 48 11 45 12 42 13 42 14 39 15 37 16 37 17 37 18 36 19 35 20 35 21 35 22 34 23 33 24 33 25 33 26 33 27 32 28 32 29 32 30 32 31 32 32 31 33 31 34 31 35 31 36 31 37 31 38 31 39 31 40 30 41 30 42 30 43 29 44 29 45 28 46 28 47 28 48 27 49 27 50 27 51 27 52 27 53 27 54 27 55 27 56 26 57 26 58 26 59 26 60 26 61 26 62 26 63 26 64 25 65 25 66 25 67 25 68 25 69 25 70 25 71 25 72 24 73 24 74 24 75 24 76 24 77 24 78 24 79 23 80 23 81 23 82 23 83 23 84 23 85 22 86 22 87 22 88 22 89 22 90 22 91 22 92 22 93 21 94 21 95 21 96 21 97 21 98 21 99 21 100 20

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