Applied Materials Inc (AMAT)

Return on equity (ROE)

		Jan 28, 2024	Oct 29, 2023	Jul 30, 2023	Apr 30, 2023	Jan 29, 2023	Oct 30, 2022	Jul 31, 2022	May 1, 2022	Jan 30, 2022	Oct 31, 2021	Aug 1, 2021	May 2, 2021	Jan 31, 2021	Oct 25, 2020	Jul 26, 2020	Apr 26, 2020	Jan 26, 2020	Oct 27, 2019	Jul 28, 2019	Apr 28, 2019
Net income (ttm)	US$ in thousands	7,158,000	6,856,000	6,443,000	6,489,000	6,450,000	6,525,000	6,646,000	6,756,000	6,550,000	5,888,000	5,307,000	4,432,000	3,857,000	3,619,000	3,186,000	2,916,000	2,827,000	2,706,000	2,765,000	3,210,000
Total stockholders’ equity	US$ in thousands	17,429,000	16,349,000	15,093,000	14,129,000	13,420,000	12,194,000	12,070,000	11,579,000	11,890,000	12,247,000	12,060,000	11,993,000	11,473,000	10,578,000	9,569,000	9,024,000	8,660,000	8,214,000	8,116,000	8,201,000
ROE		41.07%	41.94%	42.69%	45.93%	48.06%	53.51%	55.06%	58.35%	55.09%	48.08%	44.00%	36.95%	33.62%	34.21%	33.30%	32.31%	32.64%	32.94%	34.07%	39.14%

January 28, 2024 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $7,158,000K ÷ $17,429,000K
= 41.07%

Applied Materials Inc.'s return on equity (ROE) has shown a declining trend over the past several quarters. The ROE decreased from a high of 58.35% in Q2 2022 to 41.07% in Q1 2024. This decline indicates that the company's ability to generate profit from shareholders' equity has weakened over time.

The decreasing ROE may be a cause for concern as it suggests that Applied Materials Inc. is becoming less efficient in utilizing its equity to generate profits. Shareholders may view this trend negatively, as it could impact the company's overall financial performance and investor confidence.

It is important for Applied Materials Inc. to identify the factors contributing to the declining ROE and take appropriate measures to improve efficiency and profitability. Management should consider implementing strategies to enhance operational performance, optimize capital structure, and focus on enhancing shareholder value to reverse this negative trend in ROE.