Comparison of the Return on Equity and Measure of Risk by Studying Two Power Companies of the Developing Nations

Abstract

The comparative study is based on the two large IPPs of India and Pakistan. The annual profits and return on equity (RoE) ratios are compared and analyzed. The study indicated that though the annual profits of both companies differ yet both the countries have equal return on equity ratios. The study also finds strong positive correlation between net profit and RoE. Furthermore, the beta coefficient is also studied and compared for both the IPPs. Both countries were found to have huge potential for private investment in energy sector.