Baxter International Inc (BAX)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	2,656,000	-2,433,000	1,284,000	1,102,000	1,001,000
Total stockholders’ equity	US$ in thousands	8,402,000	5,833,000	9,077,000	8,689,000	7,882,000
ROE		31.61%	-41.71%	14.15%	12.68%	12.70%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $2,656,000K ÷ $8,402,000K
= 31.61%

Baxter International Inc.'s return on equity (ROE) has varied significantly over the past five years. In 2023, the ROE improved significantly to 31.61%, indicating a strong performance in generating profit from shareholders' equity. This is a positive sign for the company's profitability and efficiency.

The negative ROE of -41.71% in 2022 is concerning as it suggests that the company incurred a net loss and had insufficient profitability to cover shareholders' equity. It could be a red flag for investors and indicates potential financial challenges during that period.

The ROE of 14.15% in 2021 showed a moderate increase from the previous year, indicating a decent profitability level and efficient utilization of equity. This could imply satisfactory performance in generating returns for shareholders.

Similarly, the ROE figures of 12.68% in 2020 and 12.70% in 2019 remained relatively stable, reflecting consistent profitability and efficiency in utilizing shareholders' equity over the two years.

Overall, Baxter International Inc.'s ROE has shown fluctuation over the past five years, with a notable improvement in 2023, a significant decline in 2022, and relatively stable performance in the intervening years. It is crucial for investors to monitor these trends to assess the company's financial health and management's ability to generate returns on equity effectively.