Molina Healthcare Inc (MOH)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 1,091,000 | 792,000 | 659,000 | 673,000 | 737,000 |
| Total stockholders’ equity | US$ in thousands | 4,215,000 | 2,964,000 | 2,630,000 | 2,096,000 | 1,960,000 |
| ROE | 25.88% | 26.72% | 25.06% | 32.11% | 37.60% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $1,091,000K ÷ $4,215,000K
= 25.88%
Molina Healthcare Inc's return on equity (ROE) has exhibited a decreasing trend over the past five years. The ROE decreased from 37.60% in 2019 to 25.88% in 2023. This indicates that the company's ability to generate profits from the shareholders' equity has been declining. The ROE peaked in 2020 at 32.11% but has been on a downward trajectory since then.
A high ROE is generally preferred as it reflects efficient utilization of equity capital to generate profits. The declining trend in Molina Healthcare's ROE warrants further analysis into the company's financial performance, capital structure, and operational efficiency to identify the factors contributing to the decrease in profitability relative to shareholder investment.
Peer comparison
Dec 31, 2023