When it comes to financial indicators, how deep does your company go? Sure, net investment income is an excellent metric on its own, but your company can gain much more insight if you expand your performance metric analysis just a little bit.
At Saratoga Investment Corp., we take immense pride in our continued success that includes a Q3 net gain on investments of $1.3 million, a 6.8% average net asset value (as of Nov. 2015) and $.8 million in net neutralized gains for the past quarter. A great deal of this success comes from our in-depth analysis of performance metrics, including return on equity that includes realized and unrealized gains.
Does your company use these metrics? If not, you should consider such a move.
Return on equity (ROE), or return on net worth (RONW), is a performance characteristic you can use to see if your company is truly outstanding. Just like your earnings and dividend, a healthy ROE factors into both your investment income and nets
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That's because net realized gains not only reflect the credit quality of our portfolio, it also protects our shareholder's capital. This is a dual-faceted benefit that ensures quality remains optimal while keeping shareholders secure about their investment in Saratoga.
At Saratoga we place much of our focus on the realized and unrealized gains of our investors. Just because that is our approach doesn’t mean it’s the only way ROE can factor into your analysis. A multitude of options and tweaks can go into your analysis. With the right modifications, your ROE analysis can place focus on common equity to hone in on your return on common equity (ROCE), shareholder equity and/or several other metrics that give you a focused look into your ROE and overall