Returns On Equity

I zoomed through my Sharelock Holems account, looking for returns on equity. Here's the quartile results:

Q1: 20%
Q2: 11%
Q3:  3%
So what it's saying is that the median ROE is 11%. The top quartile earned more than 20%, and the bottom quartile earned less than 3%. Some of them will, of course, be negative, as they made losses.

There were 556 companies in the sample. You have to be very careful about interpreting the result, as some of the top companies had ROEs in excess of 100%, and two of them in excess of 1000%. These figures are, course, not credible. If only!

To see what the top ROEs were, I compiled the following table:
ROE %ile   
25% 18%
30% 13%
40% 6%
50% 5%

So, what the table is telling you is that 18% of the companies has ROEs of at least 25%. 13% of the companies had ROEs in excess of 30%, and so on. I think that one should be very careful of these ROEs, though, as they are likely the result of statistical anomolies or accounting manipulation or skewing. It seems that companies are unlikely to maintain such high ROEs, even if true.