Powell Industries Inc (POWL)
Return on equity (ROE)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 54,525 | 13,737 | 631 | 16,660 | 9,890 |
| Total stockholders’ equity | US$ in thousands | 345,026 | 297,206 | 301,223 | 306,626 | 299,153 |
| ROE | 15.80% | 4.62% | 0.21% | 5.43% | 3.31% |
September 30, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $54,525K ÷ $345,026K
= 15.80%
The return on equity (ROE) measures a company's ability to generate profits from its shareholders' equity. Let's analyze Powell Industries, Inc.'s ROE over the past five years.
In 2019, Powell Industries, Inc. had an ROE of 3.31%, indicating that it generated a profit of 3.31% on each dollar of shareholders' equity.
In 2020, the ROE improved to 5.43%, suggesting that the company became more efficient in utilizing its equity to generate profits.
The ROE further increased in 2021 to 0.21%, indicating a significant drop from the previous year. This decline could be a concerning trend, signaling a reduction in the company's ability to generate profits from shareholders' equity.
However, there was a remarkable improvement in 2022, with the ROE rising to 4.62%. This rebound suggests that the company may have taken steps to improve its profitability and efficiency.
In 2023, Powell Industries, Inc. achieved an ROE of 15.80%, marking a significant surge from the previous year. This suggests that the company significantly improved its ability to generate profits from the shareholders' equity, showcasing strong performance.
It is essential to understand the factors driving these fluctuations in ROE, including profitability, asset management, financial leverage, and the overall financial health of the company. Furthermore, management's strategic decisions and industry trends should be considered when evaluating these ROE changes to gain a comprehensive understanding of Powell Industries, Inc.'s performance and prospects.
Peer comparison
Sep 30, 2023