MGP Ingredients Inc (MGPI)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 34,663 | 107,475 | 109,462 | 91,307 | 40,345 |
| Total stockholders’ equity | US$ in thousands | 834,166 | 850,492 | 745,644 | 644,265 | 262,526 |
| ROE | 4.16% | 12.64% | 14.68% | 14.17% | 15.37% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $34,663K ÷ $834,166K
= 4.16%
MGP Ingredients Inc's return on equity (ROE) has shown a gradual decline over the years, starting at 15.37% as of December 31, 2020, and decreasing to 4.16% by December 31, 2024. This downward trend indicates a decreasing ability to generate profits from shareholders' equity investment in the company.
The company's ROE dropped from 14.17% in 2021 to 14.68% in 2022, followed by a more significant decline to 12.64% in 2023, before reaching the lowest point in 2024.
A decreasing ROE could be attributed to various factors such as declining profitability, increasing debt levels, inefficient asset utilization, or poor management of expenses. It is crucial for MGP Ingredients Inc to address these underlying issues to improve its ROE and effectively utilize shareholder funds to maximize returns.