Generac Holdings Inc (GNRC)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 214,606 | 399,502 | 550,494 | 350,576 | 252,007 |
| Total stockholders’ equity | US$ in thousands | 2,340,250 | 2,257,380 | 2,213,770 | 1,390,290 | 1,032,380 |
| ROE | 9.17% | 17.70% | 24.87% | 25.22% | 24.41% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $214,606K ÷ $2,340,250K
= 9.17%
Generac Holdings Inc's return on equity (ROE) has shown a declining trend over the past five years. The ROE decreased from 24.53% in 2019 to 8.68% in 2023, indicating a significant drop in profitability generated from shareholders' equity during this period. This downward trend suggests that the company's ability to generate profits from the shareholders' investments has weakened over time.
The declining ROE may be a cause for concern as it indicates a decrease in the efficiency of the company in utilizing its equity to generate returns for shareholders. Factors such as increasing expenses, declining revenue growth, or inefficient capital allocation could be contributing to the decreasing ROE.
Investors and stakeholders should closely monitor Generac Holdings Inc's financial performance and management strategies to understand the reasons behind the declining ROE and assess the company's long-term profitability and financial health. Further analysis and comparison with industry peers and benchmarks may provide additional insights into the company's performance and competitive position.
Peer comparison
Dec 31, 2023