CarMax Inc (KMX)
Return on equity (ROE)
| Feb 28, 2025 | Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 500,556 | 479,204 | 484,762 | 1,151,300 | 746,919 |
| Total stockholders’ equity | US$ in thousands | 891,303 | 6,073,740 | 5,613,080 | 5,235,440 | 4,364,610 |
| ROE | 56.16% | 7.89% | 8.64% | 21.99% | 17.11% |
February 28, 2025 calculation
ROE = Net income ÷ Total stockholders’ equity
= $500,556K ÷ $891,303K
= 56.16%
CarMax Inc's return on equity (ROE) has shown fluctuations over the past five years. In February 2021, the ROE stood at 17.11%, indicating that for every dollar of shareholders' equity, the company generated a return of 17.11%. Subsequently, the ROE improved to 21.99% by February 2022, suggesting better utilization of equity in generating profits.
However, there was a significant decline in ROE to 8.64% by February 2023, which could indicate challenges or inefficiencies in the company's operations impacting shareholder returns. This trend continued with a further decrease to 7.89% by February 2024, possibly signaling underlying issues affecting profitability.
Interestingly, there was a substantial improvement in ROE to 56.16% by February 2025, showcasing a remarkable resurgence in the company's ability to generate profits relative to shareholders' equity. This surge could be attributed to various factors such as improved operational efficiency, effective cost management, or strategic investments.
Overall, CarMax Inc's ROE has been volatile, reflecting fluctuations in the company's profitability and efficiency in utilizing shareholders' equity. It would be crucial for stakeholders to closely monitor future ROE trends to assess the company's financial performance and strategic direction.
Peer comparison
Feb 28, 2025