Now Inc (DNOW)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 247,000 | 128,000 | 5,000 | -427,000 | -97,000 |
| Total stockholders’ equity | US$ in thousands | 1,060,000 | 842,000 | 711,000 | 699,000 | 1,144,000 |
| ROE | 23.30% | 15.20% | 0.70% | -61.09% | -8.48% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $247,000K ÷ $1,060,000K
= 23.30%
The return on equity (ROE) of NOW Inc has shown varying trends over the past five years. In 2023, the ROE improved significantly to 23.30%, indicating that the company generated a higher level of net income relative to its shareholder equity compared to the previous year. This suggests an enhanced ability to utilize shareholder funds effectively to generate profits.
In 2022, the ROE was 15.20%, also showing an improvement from the previous year. The company's ability to generate profit with the equity invested by shareholders increased further compared to the prior year.
In 2021, the ROE was at 0.70%, indicating a minimal return relative to the shareholder equity. This could be a sign of lower profitability or inefficiency in utilizing shareholder funds to generate income.
In 2020, the ROE was significantly negative at -61.09%, reflecting that the company incurred a substantial loss relative to the equity provided by shareholders. This could indicate financial distress or operational issues affecting profitability.
In 2019, the negative ROE of -8.48% also indicated a loss-making scenario, though the magnitude of the loss was lower compared to 2020.
Overall, the ROE trend for NOW Inc has been volatile, with improvements in recent years after facing challenges in generating profit relative to shareholder equity in 2020 and 2019. Further analysis of the company's financial performance and operational efficiency is recommended to understand the factors influencing these ROE fluctuations.
Peer comparison
Dec 31, 2023