Paramount Global Class B (PARA)

Return on equity (ROE)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	-608,000	1,104,000	4,543,000	2,422,000	3,308,000
Total stockholders’ equity	US$ in thousands	22,526,000	23,036,000	22,402,000	15,371,000	13,207,000
ROE		-2.70%	4.79%	20.28%	15.76%	25.05%

December 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-608,000K ÷ $22,526,000K
= -2.70%

Paramount Global's return on equity (ROE) has exhibited a downward trend over the past five years. In 2019, the company achieved a robust ROE of 25.05%, indicating efficient utilization of equity to generate profit. However, there has been a steady decline in ROE since then, with figures of 15.76% in 2020, 20.28% in 2021, 4.79% in 2022, and a negative ROE of -2.70% in 2023.

The negative ROE in 2023 suggests that Paramount Global's net income for the period was insufficient to cover the average shareholders' equity, resulting in a loss on equity investment. This could be attributed to various factors such as decreased profitability, increased debt levels, or inefficient asset utilization.

It is crucial for Paramount Global to address the decline in ROE to ensure sustainable growth and maintain investor confidence. Management should focus on improving operational efficiency, increasing profitability, and closely monitoring the company's financial performance to enhance shareholder value in the long term.