Cognizant Technology Solutions Corp Class A (CTSH)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	2,240,000	2,126,000	2,290,000	2,137,000	1,392,000
Total stockholders’ equity	US$ in thousands	14,408,000	13,227,000	12,309,000	11,991,000	10,836,000
ROE		15.55%	16.07%	18.60%	17.82%	12.85%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $2,240,000K ÷ $14,408,000K
= 15.55%

Cognizant Technology Solutions Corp Class A has demonstrated a positive trend in its return on equity (ROE) over the past five years. The ROE increased from 12.85% as of December 31, 2020, to reach 18.60% by December 31, 2022, indicating an improvement in the company's ability to generate profits from shareholders' equity.

However, there was a slight dip in ROE to 16.07% by December 31, 2023, followed by a further decrease to 15.55% by December 31, 2024. Although the ROE declined in the last two years, it remained above the initial value in 2020, suggesting that Cognizant Technology Solutions Corp Class A continues to generate a reasonable return for its shareholders relative to the equity invested.

Overall, the company's ROE performance reflects a solid financial position and efficient management of equity investments, albeit with a slight decline in recent years. Monitoring future ROE trends will be crucial to assess the company's profitability and effectiveness in utilizing shareholder funds for generating returns.