ChampionX Corporation (CHX)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 314,238 | 154,969 | 113,299 | -743,930 | 52,164 |
| Total stockholders’ equity | US$ in thousands | 1,676,620 | 1,694,550 | 1,770,640 | 1,625,970 | 1,032,960 |
| ROE | 18.74% | 9.15% | 6.40% | -45.75% | 5.05% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $314,238K ÷ $1,676,620K
= 18.74%
ChampionX Corp.'s return on equity (ROE) has shown a positive trend over the last five years. The ROE has significantly improved from -45.75% in 2020 to 18.74% in 2023. This indicates that the company's ability to generate profits from its shareholders' equity has strengthened over time.
A low or negative ROE, as seen in 2020, may suggest inefficiency in the utilization of shareholders' equity, potentially indicating poor financial performance or high debt levels. However, the subsequent improvement in ROE demonstrates that ChampionX Corp. has managed to enhance its profitability and efficiency in capital utilization.
The consistent increase in ROE from 2021 onwards reflects positive financial performance and operational effectiveness. It suggests that the company has been able to generate higher profits relative to its equity base in recent years, which is a positive signal for shareholders.
Overall, ChampionX Corp.'s improving ROE trend indicates enhanced profitability and efficiency in utilizing shareholders' equity, reflecting positively on the company's financial strength and performance. However, continued monitoring of ROE alongside other financial metrics is recommended to assess the company's ongoing financial health and sustainability.
Peer comparison
Dec 31, 2023