Eaton Corporation PLC (ETN)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 3,218,000 | 2,462,000 | 2,144,000 | 1,410,000 | 2,211,000 |
| Total stockholders’ equity | US$ in thousands | 19,036,000 | 17,038,000 | 16,413,000 | 14,930,000 | 16,082,000 |
| ROE | 16.90% | 14.45% | 13.06% | 9.44% | 13.75% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $3,218,000K ÷ $19,036,000K
= 16.90%
Eaton Corporation plc's return on equity (ROE) has shown a positive trend over the past five years, increasing from 13.75% in 2019 to 16.90% in 2023. This indicates that the company's ability to generate profit from its shareholders' equity has been improving over the period. The consistent upward trend suggests that Eaton Corporation plc has been effectively utilizing its equity to generate returns for its shareholders.
The significant improvement in ROE from 2020 to 2023 (from 9.44% to 16.90%) indicates that the company has been able to enhance its profitability and efficiency in capital utilization. This increase could be attributed to improved operational performance, effective cost management, or strategic initiatives undertaken by the company to drive profitability.
Overall, Eaton Corporation plc's increasing ROE demonstrates that the company has been successful in generating higher returns for its shareholders relative to the equity invested. However, it would be important to further analyze the components contributing to this ROE improvement to fully understand the factors driving the company's profitability and efficiency.
Peer comparison
Dec 31, 2023