Asbury Automotive Group Inc (ABG)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	602,500	997,300	532,400	254,400	184,400
Total stockholders’ equity	US$ in thousands	3,244,100	2,903,500	2,115,500	905,500	646,300
ROE		18.57%	34.35%	25.17%	28.09%	28.53%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $602,500K ÷ $3,244,100K
= 18.57%

Asbury Automotive Group Inc's return on equity (ROE) has exhibited fluctuating trends over the past five years. The ROE was strongest in 2022 at 34.35%, indicating that the company generated $0.3435 in net income for every dollar of shareholder equity. However, there was a notable decline in ROE in 2023 to 18.57%. This decline suggests a decrease in profitability or efficiency in utilizing shareholders' equity to generate earnings.

Comparing the ROE for 2023 to the figures from 2021, 2020, and 2019, it is evident that the company's performance in 2023 was below the levels seen in previous years. The ROE in 2023 was notably lower than the average ROE of 27.06% for the four years preceding it.

The decreasing trend in ROE should prompt further investigation into the factors impacting Asbury Automotive Group Inc's profitability and efficiency. It is essential for stakeholders to understand the reasons behind the decline in ROE and assess the company's ability to generate sustainable returns for its shareholders in the future.