Mercer International Inc (MERC)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -242,056 | 247,039 | 170,988 | -17,235 | -9,639 |
| Total stockholders’ equity | US$ in thousands | 635,410 | 838,784 | 694,024 | 601,027 | 550,403 |
| ROE | -38.09% | 29.45% | 24.64% | -2.87% | -1.75% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-242,056K ÷ $635,410K
= -38.09%
Mercer International Inc.'s return on equity (ROE) has shown significant fluctuations over the past five years. The ROE was negative in 2023 at -38.09%, indicating that the company generated a net loss relative to its shareholders' equity. In contrast, the ROE improved significantly in 2022 to 29.45%, demonstrating a strong ability to generate profit from shareholders' investment. This positive trend continued in 2021 with an ROE of 24.64%.
However, the company experienced a downturn in 2020 with a negative ROE of -2.87%, signaling a decline in profitability relative to equity. Similarly, in 2019, the ROE was also negative at -1.75%.
The fluctuations in ROE suggest that Mercer International Inc. has experienced variability in its profitability and efficiency in utilizing shareholders' equity to generate returns. It is essential for the company to focus on improving its profitability to ensure sustainable growth and maximize shareholder value.