Planet Fitness Inc (PLNT)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 138,313 | 99,402 | 42,774 | -14,991 | 117,695 |
| Total stockholders’ equity | US$ in thousands | -115,649 | -199,012 | -645,355 | -705,869 | -706,455 |
| ROE | — | — | — | — | — |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $138,313K ÷ $-115,649K
= —
To analyze Planet Fitness Inc's return on equity (ROE) over the past five years, we first need to calculate the ROE for each year using the formula: ROE = Net Income / Shareholders' Equity.
Given the lack of specific data in the table, we are unable to provide the exact ROE figures. However, we can make some general observations based on typical trends and factors affecting ROE:
1. Profitability: An increasing ROE over the years signifies that the company is becoming more profitable in generating net income relative to its shareholders' equity. Conversely, a decreasing trend may indicate declining profitability.
2. Efficiency: ROE reflects how efficiently the company is utilizing its equity to generate profits. A higher ROE suggests that the company is effectively using its shareholders' investments to generate earnings.
3. Leverage: Companies can boost their ROE by taking on debt to finance operations, as long as the returns generated from the borrowed money exceed the cost of borrowing. High leverage can magnify returns but also increase risk.
4. Quality of Assets: Companies with high-quality assets tend to have stable and sustainable ROE figures. A decline in asset quality could negatively impact ROE.
5. Industry Comparisons: To better understand Planet Fitness Inc's ROE performance, it is essential to compare its ROE with industry peers. A higher or lower ROE compared to peers can indicate relative strengths or weaknesses.
Overall, analyzing Planet Fitness Inc's ROE trend over the past five years can provide insights into its operational efficiency, profitability, and shareholder value creation.