Omnicom Group Inc (OMC)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 1,391,400 | 1,316,500 | 1,407,800 | 945,400 | 1,339,100 |
| Total stockholders’ equity | US$ in thousands | 3,616,300 | 3,252,100 | 3,270,200 | 3,084,400 | 2,853,900 |
| ROE | 38.48% | 40.48% | 43.05% | 30.65% | 46.92% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $1,391,400K ÷ $3,616,300K
= 38.48%
Omnicom Group, Inc.'s return on equity (ROE) has exhibited fluctuations over the past five years, ranging from 30.65% in 2020 to 46.92% in 2019. The company's ROE decreased to 38.48% in 2023 from 40.48% in 2022 and 43.05% in 2021. This declining trend indicates that the company may be experiencing challenges in generating profit from shareholder equity.
A high ROE usually signifies effective utilization of equity to generate profits for shareholders. However, the decreasing trend in Omnicom's ROE suggests possible inefficiencies in the company's operations or financial management. This could be due to various factors such as lower net income, increased equity base, or higher debt levels.
It is essential for investors and stakeholders to assess the reasons behind the declining ROE and whether management is implementing strategies to improve profitability and efficiency. This analysis helps in understanding the company's ability to generate returns for shareholders and its overall financial health.
Peer comparison
Dec 31, 2023