Ingevity Corp (NGVT)

Return on equity (ROE)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income US$ in thousands -430,300 -5,400 211,600 118,100 181,400
Total stockholders’ equity US$ in thousands 195,200 631,400 698,300 673,800 642,100
ROE -220.44% -0.86% 30.30% 17.53% 28.25%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-430,300K ÷ $195,200K
= -220.44%

Based on the provided data, Ingevity Corp's return on equity (ROE) has shown significant fluctuations over the years.

In 2020, the ROE stood at a healthy 28.25%, indicating that the company was generating a strong return for its shareholders relative to its equity base. However, by the end of 2021, the ROE had decreased to 17.53%, which suggests a decline in the company's ability to generate profits from its shareholders' investments.

The year 2022 saw a notable improvement with the ROE increasing to 30.30%, indicating a rebound in the company's profitability and efficiency in utilizing equity to generate returns.

However, in 2023, the ROE turned negative at -0.86%, suggesting that Ingevity Corp was experiencing losses that exceeded the equity available to its shareholders. This is a concerning sign as a negative ROE indicates that the company is not generating profits to cover the shareholders' equity investment.

The situation worsened significantly by the end of 2024, with the ROE plummeting to -220.44%. Such a steep decline in ROE reflects a substantial loss-making period for the company that far exceeds the equity invested by shareholders.

In conclusion, Ingevity Corp's ROE performance has been volatile and concerning in recent years, with significant fluctuations and a sharp decline into negative territory. This trend may raise questions about the company's profitability, operational efficiency, and financial stability. Further analysis and investigation are warranted to understand the underlying reasons for these drastic changes in ROE.