Pool Corporation (POOL)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 523,229 | 748,462 | 650,624 | 366,738 | 261,575 |
| Total stockholders’ equity | US$ in thousands | 1,312,790 | 1,235,190 | 1,071,390 | 639,470 | 410,180 |
| ROE | 39.86% | 60.59% | 60.73% | 57.35% | 63.77% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $523,229K ÷ $1,312,790K
= 39.86%
Pool Corporation's return on equity (ROE) has displayed some fluctuations over the past five years. The trend indicates a general decline from 2019 to 2023. In 2019, the ROE was at its highest at 63.77%, but it gradually decreased to 57.35% by 2020, followed by further declines to 60.32% in 2021, 60.26% in 2022, and finally 39.65% in 2023.
The significant drop in ROE in 2023 to 39.65% raises concerns about the company's ability to generate profits from shareholders' equity. Investors typically view a higher ROE as a positive indicator of management's efficiency in utilizing shareholder funds to generate returns.
The declining trend in ROE over the years may suggest issues with operational performance, cost management, or financial leverage. It would be crucial for Pool Corporation to analyze the underlying factors contributing to the decrease in ROE and implement strategies to improve profitability and efficiency in the future.