Illumina Inc (ILMN)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	-1,161,000	-4,404,000	762,000	656,000	1,002,000
Total stockholders’ equity	US$ in thousands	5,745,000	6,599,000	10,740,000	4,694,000	4,613,000
ROE		-20.21%	-66.74%	7.09%	13.98%	21.72%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-1,161,000K ÷ $5,745,000K
= -20.21%

Illumina Inc's return on equity (ROE) has fluctuated significantly over the past five years, ranging from negative values to double-digit positive percentages.

In 2023, the ROE was -20.21%, indicating a negative return on equity, which may suggest inefficiency in generating profits from shareholders' equity. This could be a cause for concern as it indicates that the company's ability to utilize shareholders' equity to generate earnings is not optimal.

The ROE in 2022 was 7.09%, a moderate positive return on equity. While an improvement from the previous year, this level of ROE may still be considered relatively low for a company like Illumina Inc and could indicate room for improvement in utilizing equity to generate profits.

The ROE in 2021 was 13.98%, showing a further improvement in the company's ability to generate profits from shareholders' equity. This suggests that Illumina Inc was more efficient in utilizing equity to generate earnings compared to the previous year.

In 2020, Illumina Inc achieved an ROE of 21.72%, the highest in the given period. This indicates a strong performance in using shareholders' equity to generate profits, reflecting positively on the company's financial efficiency and effectiveness in capital allocation.

Overall, the fluctuating trend in Illumina Inc's ROE over the past five years signals varying levels of efficiency in generating profits from shareholders' equity. It is important for the company to consistently strive for higher and more stable ROE figures to demonstrate strong financial performance and effective utilization of equity.