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Dairy Farm International Holdings Ltd (SGX: D01) is a conglomerate with four main business segments: Food, Health and Beauty, Home Furnishings, and Restaurants. In Singapore, Dairy Farm is the owner of stores such as Guardian, Cold Storage, Giant Hypermarket, and 7-Eleven. In this article, I want to dig deep into Dairy Farm’ return on equity, or ROE. The choice of ROE Why the ROE some of you might be asking? That’s because the financial metric gives investors important insights on a company’s ability to generate a profit using the shareholders’ capital it has. A ROE of 20% means that a company generates $0.20 in profit for every dollar…

Dairy Farm International Holdings Ltd (SGX: D01) is a conglomerate with four main business segments: Food, Health and Beauty, Home Furnishings, and Restaurants. In Singapore, Dairy Farm is the owner of stores such as Guardian, Cold Storage, Giant Hypermarket, and 7-Eleven.

In this article, I want to dig deep into Dairy Farm’ return on equity, or ROE.

The choice of ROE

Why the ROE some of you might be asking? That’s because the financial metric gives investors important insights on a company’s ability to generate a profit using the shareholders’ capital it has.

A ROE of 20% means that a company generates $0.20 in profit for every dollar of shareholders’ capital invested. In general, the higher the ROE, the more profitable a company is. A high ROE can also be a sign that a company has a high quality business.

That being said, it’s worth noting that the use of high leverage – which increases the financial risk faced by a company – can also increase a company’s ROE. So, that’s something to observe.

Calculating ROE

ROE can be commonly calculated using the following formula:

ROE = Net Profit / Shareholder’s Equity

But, ROE can also be calculated using a different approach as shown below:

ROE = Asset Turnover x Net Profit Margin x Leverage Ratio

Doing so will reveal three important aspects about a company: how well it is managing its assets, how efficient it is at turning revenue into profit, and how much financial risk it could be taking on. For more information about this formula for ROE, you can check out the link here.

With that, let’s turn our attention to the ROE of Dairy Farm.

The actual numbers

The asset turnover measures the efficiency of a company in using its assets to generate revenue. It is calculated by dividing a company’s total revenue by its assets.

For Dairy Farm, it had total revenue of S$11.3 billion and total assets of S$ 5.5 billion for its fiscal year ended 31 December 2017 (FY2017). This gives an asset turnover of 2.05.

The net profit margin measures the percentage of revenue that is left as a profit after deduction of all expenses. In FY2017, Dairy Farm had a net profit margin of 3.5%, given its net profit of S$392.0 million and revenue of S$11.3 billion.

Lastly, we have the leverage ratio, which shows the relationship of a company’s total assets to its equity. It is calculated by dividing total assets by equity. A higher ratio means that a company is funding its assets with more liabilities, hence resulting in higher risk. In FY2017, Dairy Farm had total assets and total equity of S$5.5 billion and S$1.8 billion respectively. This gives a leverage ratio of 3.06.

When we put all the numbers together, we arrive at a ROE of 22%.

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The recent flood of Black celebrities on the cover of the coveted September issues is a serious celebration of Black Excellence. Ghanaian photographer, Phloshop, and his team recreated some of the looks for “Vogue Unofficial”.

While superstar, Rihanna, was transformed into a high-fashion avant-garde character in one of the most iconic editorials we have ever seen for British Vogue, Beyoncé looked like a work of art on the cover of Vogue US. Both looks echo black intense creativity and Black power.

Rihanna covers British Vogue's September issue shot by fashion photographer Nick Knightplay

Rihanna covers British Vogue’s September issue shot by fashion photographer Nick Knight

(The Cut)

Not only were the stars featured on the cover black, but the team behind the shoots too. After Vogue editor-in-chief Anna Wintour gave Beyoncé unprecedented control over the cover of the upcoming September issue, the singer made history by choosing a team of a black photographer, Tyler Mitchell and creative director, Kwasi Fordjour. For British Vogue, the Editor-in-Chief, Edward Enninful made history earlier this year by becoming the first black man to take the helm at Vogue magazine in the magazine’s 102 year history and there was no surprise that he picked Rihanna for his first September cover.

Beyonce's Vogue September Issue revealedplay

Beyonce’s Vogue September Issue revealed

(Instagram/ Beyonce)

Unapologetic Black

“Vogue Unofficial� is a recreation of the iconic and historic September 2018 issues of US Vogue and British Vogue. It is a thing of pride for Ghanaians who, still celebrating a show of Black Excellence with these covers, have to recognise the Ghanaian-born geniuses behind the shoots, Kwasi Fordjour and Edward Enninful. This is why Ghanaian photographer, Phloshop, and his team of make up artists, models, art director, took to recreating the iconic looks as a way to pay tribute to their brothers as they take charge of the world of arts by breaking colour barriers.

Ghanaian creative team recreate Vogue September beauty looksplay

Ghanaian creative team recreate Vogue September beauty looks

(Instagram/Phloshop)

In a post on Instagram, Phloshop announced the motivation behind the shoots:

“Through our themes “UNAPOLOGETIC. BLACK.â€� “INGENUITY. BLACK.â€�, we re-echo all the messages and values carried by these powerful black women on the cover of these magazines and what it means to all young black women in Ghana and Africa. Our shoot further explores Blackness as a symbol of INTELLECT, INGENUITY and SELF-LOVE.”

While the make up ranged from natural to mad hatter-esque for the models, as were the original look, the makeup artist was able to make their dark skin look stunning even before retouching. The art director also did a heck of a job recreating the art pieces worn on their heads.

Black, indeed, is power.

Ghanaian creative team recreate Vogue September beauty looksplay

Ghanaian creative team recreate Vogue September beauty looks

(Instagram/Phloshop)

Ghanaian creative team recreate Vogue September beauty looksplay

Ghanaian creative team recreate Vogue September beauty looks

(Instagram/Phloshop)

Photography: @phloshop @iamjunie07
Art director: @coffee_session.art
Stylist: @sey_culture Designer @lakopue
Make up: @jaedollhouse
Models: @_keylah @penny_yeboaa
Videography: @itscharkie

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