Advance Auto Parts Inc (AAP)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 29,735 | 464,402 | 616,108 | 493,021 | 486,896 |
| Total stockholders’ equity | US$ in thousands | 2,519,730 | 2,599,190 | 3,129,450 | 3,559,510 | 3,549,080 |
| ROE | 1.18% | 17.87% | 19.69% | 13.85% | 13.72% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $29,735K ÷ $2,519,730K
= 1.18%
Advance Auto Parts Inc's return on equity (ROE) has fluctuated over the past five years, ranging from a low of 1.18% in 2023 to a high of 19.69% in 2021. The downward trend in ROE from 2021 to 2023 indicates a decrease in the company's ability to generate profit from shareholders' equity. This decrease may be a cause for concern as it suggests that the company is not efficiently utilizing its equity to generate profits.
In contrast, the higher ROE figures in 2021 and 2022 suggest that the company was more efficient in generating returns for shareholders during those years. However, the significant drop in 2023 raises questions about the company's financial health and operational efficiency. Investors and stakeholders may want to investigate the reasons behind this decline in ROE to determine if it is a short-term fluctuation or a more serious concern regarding the company's performance and profitability.
Peer comparison
Dec 31, 2023