Calavo Growers Inc (CVGW)
Return on equity (ROE)
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -8,344 | -6,249 | -11,818 | -13,625 | 36,646 |
| Total stockholders’ equity | US$ in thousands | 208,837 | 222,356 | 225,515 | 254,530 | 284,181 |
| ROE | -4.00% | -2.81% | -5.24% | -5.35% | 12.90% |
October 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-8,344K ÷ $208,837K
= -4.00%
The return on equity (ROE) for Calavo Growers, Inc has exhibited fluctuating trends over the past five years. In 2019, the ROE stood at a notable 12.90%, indicating efficient utilization of shareholder equity to generate profits. However, in subsequent years, there was a significant downturn in performance, with the ROE turning negative.
In 2020, the negative ROE of -5.35% suggested a potential inefficiency in utilizing equity to generate profits. This trend continued into 2021 and 2022, with the ROE remaining negative at -5.24% and -2.81% respectively, indicating a continuing struggle to generate adequate returns on equity.
In the most recent period, ending October 31, 2023, the trend of negative ROE persisted, with the ratio standing at -4.00%. This indicates that the company still faces challenges in generating returns on the equity provided by its shareholders.
Overall, the negative ROE in the recent years may raise concerns among investors and stakeholders regarding the company's ability to maximize returns on their investments and its operational efficiency. Further analysis of the company's financial and operational strategies would be necessary to determine the underlying causes of the declining ROE and to develop appropriate corrective measures.