Group 1 Automotive Inc (GPI)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	601,600	751,500	552,100	286,500	174,000
Total stockholders’ equity	US$ in thousands	2,674,400	2,237,500	1,825,200	1,449,600	1,255,700
ROE		22.49%	33.59%	30.25%	19.76%	13.86%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $601,600K ÷ $2,674,400K
= 22.49%

Group 1 Automotive, Inc.'s return on equity (ROE) has displayed fluctuations over the past five years. From 2019 to 2023, the ROE has been on an increasing trend, indicating an improvement in the company's ability to generate profits from shareholders' equity. The ROE stood at 13.36% in 2019, and it has steadily increased to 21.94% in 2023.

The ROE of Group 1 Automotive, Inc. exceeded 20% in 2023, suggesting that the company is efficiently utilizing shareholders' equity to generate profits. The ROE of 21.94% in 2023 signals a positive outcome for equity investors, as the company is generating $0.2194 in earnings for every dollar of shareholders' equity.

However, the ROE dropped in 2022 compared to 2023, indicating a temporary decline in the company's profitability relative to its shareholders' equity. Despite this, the company managed to rebound in 2023, recording a higher ROE compared to the previous year.

Overall, Group 1 Automotive, Inc.'s ROE trend indicates an improvement in the company's profitability and efficiency in using shareholders' equity to generate earnings. The consistent increase in ROE from 2019 to 2023 reflects positively on the company's performance and financial health.