BorgWarner Inc (BWA)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 338,000 | 625,000 | 944,000 | 537,000 | 500,000 |
| Total stockholders’ equity | US$ in thousands | 5,532,000 | 5,828,000 | 7,224,000 | 6,948,000 | 6,428,000 |
| ROE | 6.11% | 10.72% | 13.07% | 7.73% | 7.78% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $338,000K ÷ $5,532,000K
= 6.11%
BorgWarner Inc's return on equity (ROE) has shown some fluctuations over the past five years. In December 2020 and 2021, the ROE was around 7.7%, indicating that for each dollar of shareholders' equity, the company generated a return of approximately 7.7 cents.
There was a notable improvement in ROE in December 2022, reaching 13.1%. This substantial increase suggests that BorgWarner was able to significantly enhance its profitability and efficiency in utilizing shareholders' equity to generate earnings.
However, the ROE dipped in December 2023 to 10.7% and further decreased to 6.1% by December 2024. These declining ROE figures might indicate a potential decrease in the company's profitability or a less efficient utilization of equity capital to generate profits.
Overall, it is crucial for BorgWarner Inc to closely monitor and assess the factors contributing to the fluctuations in ROE to sustain and improve its financial performance and shareholder value in the future.
Peer comparison
Dec 31, 2024