Advanced Micro Devices Inc (AMD)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 1,641,000 | 854,000 | 1,320,000 | 3,162,000 | 2,490,000 |
| Total stockholders’ equity | US$ in thousands | 57,568,000 | 55,892,000 | 54,750,000 | 7,497,000 | 5,837,000 |
| ROE | 2.85% | 1.53% | 2.41% | 42.18% | 42.66% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $1,641,000K ÷ $57,568,000K
= 2.85%
The return on equity (ROE) of Advanced Micro Devices Inc has shown a gradual decline over the years, starting from a strong level of 42.66% as of December 31, 2020. Despite a slight decrease to 42.18% by December 31, 2021, the ROE remained at a relatively high level. However, there was a significant drop in ROE to 2.41% by December 31, 2022, suggesting a considerable decline in the company's profitability generated from shareholders' equity.
The trend continued with a further decrease to 1.53% by December 31, 2023, indicating challenges the company might have been facing in generating profits from its shareholders' investments. It is noteworthy that the ROE slightly improved to 2.85% by December 31, 2024, but it still remained relatively low compared to the initial levels.
The decreasing trend in the ROE of Advanced Micro Devices Inc raises concerns about the company's efficiency in generating profits from its equity base. Further analysis and investigation into the company's financial performance and strategies may be warranted to understand the underlying reasons behind the declining ROE and to identify potential areas for improvement.
Peer comparison
Dec 31, 2024