Hormel Foods Corporation (HRL)
Return on equity (ROE)
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | Oct 27, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 793,572 | 999,987 | 908,839 | 908,082 | 978,806 |
| Total stockholders’ equity | US$ in thousands | 7,734,880 | 7,535,280 | 6,972,880 | 6,425,550 | 5,921,460 |
| ROE | 10.26% | 13.27% | 13.03% | 14.13% | 16.53% |
October 29, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $793,572K ÷ $7,734,880K
= 10.26%
The return on equity (ROE) is an important financial metric that measures a company's profitability and efficiency in utilizing its equity to generate earnings. Analyzing Hormel Foods Corp.'s ROE over the past five years reveals a trend of declining profitability and efficiency.
In 2023, the ROE stands at 10.26%, which is notably lower than the previous year's 13.27% and continues a downward trend observed since 2019. This decline suggests that the company is generating less profit from the shareholders' equity investment.
Several factors may contribute to this decline, including increased operating costs, lower net income, or a decrease in asset turnover. The company may also have taken on more debt, which could impact the equity returns.
For further insight, it would be beneficial to compare Hormel Foods Corp.'s ROE with that of its industry peers and to explore specific financial and operational aspects affecting its profitability and efficiency.