MaxLinear Inc (MXL)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	-73,147	125,040	41,969	-98,593	-19,898
Total stockholders’ equity	US$ in thousands	686,265	676,385	489,198	391,117	414,920
ROE		-10.66%	18.49%	8.58%	-25.21%	-4.80%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-73,147K ÷ $686,265K
= -10.66%

MaxLinear Inc's Return on Equity (ROE) has exhibited fluctuating trends over the past five years. In 2023, the ROE stood at -10.66%, marking a significant decrease from the previous year's 18.49%. This downturn in ROE may raise concerns among stakeholders as it indicates a reduction in the company's ability to generate profits from the shareholders' equity.

The positive ROE of 18.49% in 2022 demonstrated the company's capability to generate substantial returns on the shareholders' equity, reflecting a profitable utilization of its equity capital. However, the downward trend in ROE over the prior years, including 8.58% in 2021, -25.21% in 2020, and -4.80% in 2019, suggests a history of inconsistent performance in generating returns on the equity investment.

A negative ROE, such as the one observed in 2023 and 2020, signals that the company's net income was insufficient to cover the dividends and resulted in a loss, thereby eroding shareholder value. This may raise concerns about the company's operational efficiency and financial stability, potentially impacting its attractiveness to potential investors.

Overall, while the ROE fluctuated over the past five years, the recent decline in 2023 indicates a need for MaxLinear Inc to assess its profitability and capital management strategies to improve its ability to generate returns on the shareholders' equity and enhance shareholder value.