Return on Assets is not a suitable metric for comparing WOW & WES because both operate in a the FMCG business which allows companies to generate profits off a low asset base (inventory mgt etc..) which is what leads to the high ROE. ROE is also not suitable with WOW becuase they have geared up in the past which will cause ROE to increase. As a result ROC is the best metric for WOW.
In any case, the only way to compare two companies going forward will be the EBIT margins. Compare the two and it is apparent that WES is where WOW was in 2005. However since WES took over this has increased exponentially. One only has to look at the margins WES achieve at Bunnings to see what they can do to Coles.
wow vs wes roic, page-13
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