eBay Inc (EBAY)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	1,975,000	2,767,000	-1,269,000	13,608,000	5,667,000
Total stockholders’ equity	US$ in thousands	5,158,000	6,396,000	5,153,000	9,778,000	3,561,000
ROE		38.29%	43.26%	-24.63%	139.17%	159.14%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $1,975,000K ÷ $5,158,000K
= 38.29%

eBay Inc's return on equity (ROE) has exhibited fluctuations over the past five years. In December 2020, eBay reported a high ROE of 159.14%, indicating that the company generated $1.59 in profit for every dollar of shareholders' equity. The following year, in December 2021, eBay's ROE slightly decreased to 139.17%, still reflecting strong profitability.

However, there was a significant decline in ROE by December 2022 to -24.63%, indicating that eBay experienced a net loss relative to its equity during that period. This negative ROE suggests that eBay's financial performance was not favorable in that particular year.

Subsequently, eBay's ROE rebounded by December 2023 to 43.26%, signifying an improvement in profitability compared to the previous year. By the end of December 2024, eBay's ROE was reported at 38.29%, indicating continued profitability but at a slightly lower level than in the preceding year.

Overall, it is essential for eBay Inc to closely monitor its ROE to ensure sustainable profitability and effectively utilize shareholder equity to generate adequate returns. Additionally, the company should investigate the factors contributing to the negative ROE in 2022 and implement strategies to mitigate such occurrences in the future.