Diamondback Energy Inc (FANG)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	3,338,000	3,143,000	4,386,000	2,182,000	-4,672,000
Total stockholders’ equity	US$ in thousands	37,736,000	16,625,000	15,009,000	12,088,000	8,794,000
ROE		8.85%	18.91%	29.22%	18.05%	-53.13%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $3,338,000K ÷ $37,736,000K
= 8.85%

Based on the data provided, Diamondback Energy Inc's return on equity (ROE) has shown significant fluctuations over the years:

1. December 31, 2020: Negative ROE of -53.13% indicates that the company's net income was insufficient to cover shareholders' equity, signaling potential financial distress or inefficiency in managing assets.

2. December 31, 2021: ROE improved to 18.05%, indicating a positive turnaround as the company generated a reasonable return on the shareholders' equity invested.

3. December 31, 2022: ROE further increased to 29.22%, reflecting enhanced profitability and efficiency in utilizing shareholders’ equity to generate earnings.

4. December 31, 2023: ROE slightly decreased to 18.91%, still maintaining a relatively healthy return on equity compared to previous years.

5. December 31, 2024: ROE dropped to 8.85%, suggesting a decline in the company's ability to generate profits from shareholders' equity, which may indicate challenges in sustaining previous levels of performance.

Overall, Diamondback Energy Inc’s ROE has displayed variability, with periods of strong performance and others with lower returns. It is essential for the company to focus on strategies that can help maintain and improve ROE to ensure sustainable growth and value creation for shareholders.