International Paper (IP)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 288,000 | 1,504,000 | 1,752,000 | 482,000 | 1,225,000 |
| Total stockholders’ equity | US$ in thousands | 8,355,000 | 8,497,000 | 9,082,000 | 7,854,000 | 7,713,000 |
| ROE | 3.45% | 17.70% | 19.29% | 6.14% | 15.88% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $288,000K ÷ $8,355,000K
= 3.45%
International Paper Co.'s return on equity (ROE) has exhibited fluctuating trends over the past five years. In 2023, the ROE decreased significantly to 3.45% compared to 17.70% in 2022 and 19.29% in 2021. This decline suggests a decrease in the company's ability to generate profits from shareholders' equity. The ROE was substantially lower than the 2019 level of 15.88%, indicating a downward trend in profitability efficiency.
The downward trend in ROE could be attributed to various factors such as lower net income, higher equity base, or inefficient utilization of resources. Investors and stakeholders may be concerned about the declining ROE as it indicates a diminishing return on the company's equity capital. Further analysis is recommended to determine the root causes of the decrease in ROE and identify potential strategies to improve profitability and efficiency in the future.
Peer comparison
Dec 31, 2023