IPG Photonics Corporation (IPGP)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	218,878	109,909	278,416	159,572	180,234
Total stockholders’ equity	US$ in thousands	2,415,380	2,385,360	2,746,580	2,592,820	2,401,730
ROE		9.06%	4.61%	10.14%	6.15%	7.50%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $218,878K ÷ $2,415,380K
= 9.06%

Over the past five years, IPG Photonics Corp's return on equity (ROE) has shown fluctuations. In 2023, the company's ROE improved to 9.06% from 4.61% in 2022. This increase is a positive sign as it indicates that the company generated a higher net income relative to its shareholders' equity in 2023 compared to the previous year.

However, when observing a longer period, the ROE of 9.06% in 2023 is lower than the ROE reported in 2021, which was 10.14%. This suggests that the company was more efficient in generating profits relative to its equity in 2021 compared to 2023.

Overall, it is essential for IPG Photonics Corp to maintain a consistent and preferably increasing ROE over time to demonstrate its ability to generate higher returns for its shareholders. It is crucial for the company to continue focusing on improving its operational efficiency and profitability in order to enhance its ROE in the future.