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Mannai Corporation Q.P.S.C. (DSM:MCCS) Delivered A Better ROE Than Its Industry

Simply Wall St · 6d ago

One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. We'll use ROE to examine Mannai Corporation Q.P.S.C. (DSM:MCCS), by way of a worked example.

Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.

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How To Calculate Return On Equity?

The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Mannai Corporation Q.P.S.C is:

20% = ر.ق198m ÷ ر.ق1.0b (Based on the trailing twelve months to September 2025).

The 'return' is the profit over the last twelve months. That means that for every QAR1 worth of shareholders' equity, the company generated QAR0.20 in profit.

Check out our latest analysis for Mannai Corporation Q.P.S.C

Does Mannai Corporation Q.P.S.C Have A Good ROE?

One simple way to determine if a company has a good return on equity is to compare it to the average for its industry. However, this method is only useful as a rough check, because companies do differ quite a bit within the same industry classification. As you can see in the graphic below, Mannai Corporation Q.P.S.C has a higher ROE than the average (11%) in the Industrials industry.

roe
DSM:MCCS Return on Equity January 6th 2026

That is a good sign. Bear in mind, a high ROE doesn't always mean superior financial performance. A higher proportion of debt in a company's capital structure may also result in a high ROE, where the high debt levels could be a huge risk . To know the 3 risks we have identified for Mannai Corporation Q.P.S.C visit our risks dashboard for free.

How Does Debt Impact ROE?

Companies usually need to invest money to grow their profits. That cash can come from retained earnings, issuing new shares (equity), or debt. In the case of the first and second options, the ROE will reflect this use of cash, for growth. In the latter case, the debt used for growth will improve returns, but won't affect the total equity. In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.

Mannai Corporation Q.P.S.C's Debt And Its 20% ROE

Mannai Corporation Q.P.S.C clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 2.78. The combination of a rather low ROE and significant use of debt is not particularly appealing. Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.

Conclusion

Return on equity is one way we can compare its business quality of different companies. In our books, the highest quality companies have high return on equity, despite low debt. If two companies have the same ROE, then I would generally prefer the one with less debt.

But when a business is high quality, the market often bids it up to a price that reflects this. It is important to consider other factors, such as future profit growth -- and how much investment is required going forward. Check the past profit growth by Mannai Corporation Q.P.S.C by looking at this visualization of past earnings, revenue and cash flow.

Of course Mannai Corporation Q.P.S.C may not be the best stock to buy. So you may wish to see this free collection of other companies that have high ROE and low debt.