Medpace Holdings Inc (MEDP)

Return on equity (ROE)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Net income (ttm)	US$ in thousands	404,386	365,666	339,790	312,507	282,810	273,182	268,659	256,951	245,368	226,732	209,279	199,853	181,848	182,680	175,566	159,736	145,384	124,331	106,848	110,199
Total stockholders’ equity	US$ in thousands	825,545	881,439	763,599	671,542	558,950	470,912	391,060	347,262	386,387	349,885	283,252	605,016	952,928	898,085	851,882	858,927	805,779	791,629	738,069	717,799
ROE		48.98%	41.49%	44.50%	46.54%	50.60%	58.01%	68.70%	73.99%	63.50%	64.80%	73.88%	33.03%	19.08%	20.34%	20.61%	18.60%	18.04%	15.71%	14.48%	15.35%

December 31, 2024 calculation

ROE = Net income (ttm) ÷ Total stockholders’ equity
= $404,386K ÷ $825,545K
= 48.98%

Return on Equity (ROE) is a key financial ratio that measures a company's profitability by evaluating how effectively it generates profit from shareholders' equity. Looking at the historical ROE trend of Medpace Holdings Inc from March 31, 2020, to December 31, 2024, we observe fluctuations in the ratio.

Medpace's ROE has shown a generally upward trend from March 2020 to June 2022, with values ranging from 15.35% to 73.88%. This indicates that the company was efficiently utilizing its equity to generate profits during this period. The sharp increase in ROE from March 2022 to June 2022 could be attributed to improved profitability or possibly financial maneuvers that boosted shareholder equity relative to net income.

However, from September 2022 to December 2024, the ROE started to decline, indicating a reduction in profitability relative to shareholder equity. The ROE values ranged from 41.49% to 50.60% during this period, suggesting that Medpace's profitability may have slowed down or that its shareholder equity growth outpaced profit growth.

Overall, while Medpace Holdings Inc experienced fluctuations in its ROE, it is important for stakeholders to further investigate the reasons behind these variations to assess the company's performance and financial health accurately.