The Clorox Company (CLX)
Return on equity (ROE)
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 810,000 | 280,000 | 149,000 | 462,000 | 710,000 |
| Total stockholders’ equity | US$ in thousands | 321,000 | 328,000 | 220,000 | 556,000 | 411,000 |
| ROE | 252.34% | 85.37% | 67.73% | 83.09% | 172.75% |
June 30, 2025 calculation
ROE = Net income ÷ Total stockholders’ equity
= $810,000K ÷ $321,000K
= 252.34%
The Clorox Company’s return on equity (ROE) exhibits significant fluctuation over the five-year period from June 30, 2021, to June 30, 2025. In fiscal year 2021, the ROE stood at an exceptionally high level of 172.75%, indicating that the company was highly effective in generating profit relative to shareholders’ equity during that period. However, this figure experienced a notable decline in the subsequent year to 83.09%, reflecting a reduced efficiency in generating returns on shareholders’ investments but still remaining relatively high.
The downward trend continued into fiscal year 2023, with the ROE decreasing further to 67.73%. This decline suggests increasing challenges in maintaining the high profitability levels observed earlier, or potential changes in the company's equity structure or net income margins. Interestingly, in fiscal year 2024, the ROE rebounded significantly to 85.37%, indicating an improvement in profitability or a reduction in equity base, or a combination of both.
The most dramatic change occurs in fiscal year 2025, where the ROE surges sharply to 252.34%. This substantial increase may be indicative of a particularly strong year in profitability, a significant reduction in shareholders’ equity, or both. Such an extraordinary ROE could also be influenced by extraordinary items or strategic financial leverage.
Overall, the ROE trend suggests periods of high profitability interspersed with declines and subsequent recoveries. The large variability underscores the importance of examining underlying factors such as net income fluctuations, changes in equity, and financial leverage to better interpret the drivers behind these shifts. The sharp rise in 2025 warrants further analysis to determine whether it reflects sustainable operational improvements or extraordinary items impacting reported net income and shareholders’ equity.