Advance Auto Parts Inc (AAP)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -335,788 | 29,735 | 464,402 | 596,615 | 493,021 |
| Total stockholders’ equity | US$ in thousands | 2,169,940 | 2,519,730 | 2,599,190 | 3,128,290 | 3,559,510 |
| ROE | -15.47% | 1.18% | 17.87% | 19.07% | 13.85% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-335,788K ÷ $2,169,940K
= -15.47%
Advance Auto Parts Inc's return on equity (ROE) has shown some fluctuations over the past five years. The ROE increased from 13.85% in December 2020 to 19.07% in December 2021, indicating improved profitability relative to shareholder equity during that period. However, in December 2022, the ROE slightly decreased to 17.87%, which is still a strong performance compared to the previous years.
A significant drop was observed in December 2023, with the ROE plummeting to 1.18%. This sharp decline could suggest challenges in generating profits relative to the equity invested in the company. Furthermore, the trend worsened in December 2024, as the ROE turned negative to -15.47%, indicating that the company may have incurred losses or struggled to generate profits effectively.
Overall, the ROE trend of Advance Auto Parts Inc shows initial improvement followed by a significant decline in recent years. It is essential for the company to closely examine the factors contributing to the deteriorating ROE and implement strategies to enhance profitability and efficiency in the utilization of equity.
Peer comparison
Dec 31, 2024