Archer-Daniels-Midland Company (ADM)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 1,800,000 | 3,483,000 | 4,340,000 | 2,709,000 | 1,772,000 |
| Total stockholders’ equity | US$ in thousands | 22,168,000 | 24,132,000 | 24,284,000 | 22,477,000 | 20,000,000 |
| ROE | 8.12% | 14.43% | 17.87% | 12.05% | 8.86% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $1,800,000K ÷ $22,168,000K
= 8.12%
Archer-Daniels-Midland Company's return on equity (ROE) has exhibited fluctuations over the five-year period from December 31, 2020, to December 31, 2024. The ROE increased from 8.86% in 2020 to 12.05% in 2021, indicating an improvement in the company's ability to generate profits from its shareholders' equity.
Subsequently, the ROE experienced a significant surge to 17.87% by the end of 2022, demonstrating a substantial increase in profitability relative to the equity invested by shareholders. This could suggest efficient utilization of resources to enhance returns.
However, in 2023, the ROE decreased to 14.43%, indicating a slight decline in the company's profitability compared to the preceding year. This decrease might be attributed to various factors such as changes in the industry landscape or company-specific challenges.
By December 31, 2024, the ROE further declined to 8.12%, which is notably lower compared to the peak in 2022. This decrease could be a point of concern as it signifies a reduction in the company's ability to generate profits from shareholders' equity.
Overall, the fluctuating trend in ROE for Archer-Daniels-Midland Company over the five-year period highlights the importance of monitoring profitability and efficiency in utilizing shareholder equity to drive sustainable growth and value creation.
Peer comparison
Dec 31, 2024