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Tuesday, Oct 3, 2023


ADD TO BOTTOM OF THE LIST STORY While Disney is the Valley’s No. 1 public company, based on revenues, it is only No. 13 when it comes to profitability. Disney’s five-year average return on equity is 16 percent, according to research company Market Guide Inc. That’s less than half the level of the Valley’s most profitable public company, Amgen, which posted a five-year average return on equity of 33.6 percent. Amgen is less impressive from a revenue perspective, appearing on this week’s list in the No. 6 spot with 1997 revenues of $7.2 billion. The Valley company that fared best in terms of both revenues and profitability was Foundation Health Systems, ranking No. 2 both in terms of profitability and revenues. It has posted a five-year average return on equity of 27.3 percent. Return on equity is a widely used measure of profitability because it shows how effectively a company has used its shareholders’ equity to generate profits. The percentage is calculated by dividing net income before extraordinary items by the average shareholders’ equity at the beginning and end of a given period.

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