Cadence Design Systems Inc (CDNS)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	1,055,480	1,041,140	848,952	695,955	590,644
Total stockholders’ equity	US$ in thousands	4,673,580	3,404,270	2,745,110	2,740,680	2,493,020
ROE		22.58%	30.58%	30.93%	25.39%	23.69%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $1,055,480K ÷ $4,673,580K
= 22.58%

Cadence Design Systems Inc's return on equity (ROE) has shown a generally upward trend over the past five years, increasing from 23.69% in December 31, 2020, to a peak of 30.93% in December 31, 2022. This indicates that the company has been efficiently utilizing its shareholders' equity to generate profits. However, there was a slight decline in ROE to 22.58% by the end of December 31, 2024, which could potentially be a point of concern for investors.

The fluctuation in ROE could be attributed to various factors such as changes in profitability, leverage, or asset utilization. It is essential for Cadence Design Systems Inc to closely monitor and address the drivers impacting its ROE to ensure sustainable growth and value creation for its shareholders.

Overall, while the company has exhibited strong ROE figures in recent years, management should continue to focus on strategic initiatives to maintain and potentially improve this key financial metric in the future.