International Business Machines (IBM)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 7,502,000 | 1,639,000 | 5,743,000 | 5,590,000 | 9,431,000 |
| Total stockholders’ equity | US$ in thousands | 22,533,000 | 21,944,000 | 18,901,000 | 20,597,000 | 20,841,000 |
| ROE | 33.29% | 7.47% | 30.38% | 27.14% | 45.25% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $7,502,000K ÷ $22,533,000K
= 33.29%
The Return on Equity (ROE) of International Business Machines Corp. has fluctuated over the past five years. In 2019, the ROE was at its peak at 45.26%, reflecting strong profitability relative to shareholder equity. Subsequently, the ROE decreased to 27.14% in 2020 but rebounded in 2021 to 30.38%. The ROE saw a significant increase to 7.48% in 2022 before surging to 33.29% in 2023.
The substantial increase in ROE in 2023 indicates that the company was able to generate higher profits relative to shareholder equity compared to the previous year. This could be attributed to improved operational efficiency, higher revenues, effective cost management, or a combination of these factors. It is important to note that a higher ROE signifies better profitability and efficient utilization of shareholder funds, which can be favorable for investors and stakeholders.
Overall, the fluctuating trend in ROE indicates that International Business Machines Corp. has experienced varying levels of profitability and efficiency in recent years. Investors and analysts may need to delve deeper into the company's financial performance and operations to understand the drivers behind these fluctuations and assess the sustainability of the improved ROE in 2023.
Peer comparison
Dec 31, 2023