Allegion PLC (ALLE)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 540,400 | 458,000 | 483,000 | 314,300 | 401,800 |
| Total stockholders’ equity | US$ in thousands | 1,318,300 | 941,800 | 759,100 | 829,400 | 757,400 |
| ROE | 40.99% | 48.63% | 63.63% | 37.89% | 53.05% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $540,400K ÷ $1,318,300K
= 40.99%
Allegion plc's return on equity (ROE) fluctuated over the past five years, as indicated by the data provided. The ROE decreased from 53.05% in 2019 to 37.89% in 2020 before rebounding to 63.63% in 2021. Subsequently, there was a decline in ROE to 48.63% in 2022 and a further decrease to 40.99% in 2023.
The decreasing trend in ROE from 2021 to 2023 suggests potential challenges in the company's ability to generate profit relative to shareholders' equity. A declining ROE may indicate inefficiencies in asset utilization, increased financial leverage, or declining profitability.
It is essential for Allegion plc to evaluate the factors contributing to the variations in ROE over the years and implement strategies to improve its profitability and efficiency in utilizing shareholders' equity. Monitoring key performance indicators and implementing measures to enhance operational efficiency and financial performance could help in sustaining or improving ROE in the future.