Chesapeake Energy Corp (CHK)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	2,419,000	4,936,000	945,000	-9,734,000	-308,000
Total stockholders’ equity	US$ in thousands	10,729,000	9,124,000	5,671,000	-5,341,000	4,364,000
ROE		22.55%	54.10%	16.66%	—	-7.06%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $2,419,000K ÷ $10,729,000K
= 22.55%

Chesapeake Energy Corp's return on equity (ROE) measures the company's ability to generate profits from the shareholders' equity investment. From the data provided, we observe fluctuations in Chesapeake Energy Corp's ROE over the past five years.

In 2023, the ROE stands at 22.55%, showing a decrease from the previous year's 54.10%. This decline may raise concerns about the company's efficiency in utilizing shareholder equity to generate profits. However, it is important to note that the ROE of 22.55% still indicates that the company is generating a reasonable return on the equity invested by shareholders.

In 2022, Chesapeake Energy Corp reported a high ROE of 54.10%, indicating that the company was very efficient in utilizing shareholders' equity to generate profits. This sharp increase from 16.66% in 2021 suggests an improvement in profitability and efficiency.

The ROE of 16.66% in 2021, although lower than in 2022, still demonstrates a moderate return on equity. This indicates that the company was able to generate profits relative to the equity invested by shareholders.

The negative ROE of -7.06% in 2019 raises concerns as it implies that the company incurred a net loss relative to shareholders' equity. Negative ROE can be a red flag for investors as it indicates inefficiency in utilizing equity to generate profits.

Overall, Chesapeake Energy Corp's ROE fluctuated over the past five years, with the company displaying varying levels of profitability and efficiency in utilizing shareholders' equity. It is essential for investors and stakeholders to closely monitor these trends to assess the company's financial performance and sustainability.