Cadence Design Systems Inc (CDNS)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	1,041,140	848,952	695,955	590,644	988,979
Total stockholders’ equity	US$ in thousands	3,404,270	2,745,110	2,740,680	2,493,020	2,102,890
ROE		30.58%	30.93%	25.39%	23.69%	47.03%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $1,041,140K ÷ $3,404,270K
= 30.58%

Cadence Design Systems, Inc. has demonstrated a relatively stable return on equity (ROE) over the past five years, with the ROE ranging from 23.69% in January 2, 2021, to a peak of 47.03% in December 28, 2019. The ROE for the most recent year ending on December 31, 2023, stands at 30.58%, showing a slight decrease compared to the previous year's ROE of 30.93% in December 31, 2022.

The consistently high ROE levels indicate that Cadence Design Systems, Inc. has been effectively utilizing its shareholders' equity to generate profits. The ROE exceeding 20% for the majority of the years reflects the company's ability to generate a strong return relative to its equity base. Investors may view this positively as it suggests the company efficiently leverages equity to create value.

However, a slight decrease in ROE from 2022 to 2023 warrants further analysis to understand the factors impacting the company's profitability and efficiency in utilizing shareholder equity. It is essential for Cadence Design Systems, Inc. to monitor and address any potential challenges that could affect its ROE in the future.