PriceSmart Inc (PSMT)

Return on equity (ROE)

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Net income	US$ in thousands	109,205	104,534	97,963	78,109	73,191
Total stockholders’ equity	US$ in thousands	1,107,040	991,073	915,345	831,719	797,351
ROE		9.86%	10.55%	10.70%	9.39%	9.18%

August 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $109,205K ÷ $1,107,040K
= 9.86%

The return on equity (ROE) of Pricesmart Inc. over the past five years has shown a relatively stable trend, ranging from 9.09% in 2019 to 10.56% in 2021. In 2023, the ROE decreased to 9.86% from the previous year's 10.42%.

ROE is a key financial ratio that measures a company's profitability by assessing how effectively it generates profits from shareholders' equity. A higher ROE indicates that a company is using its shareholders' equity more efficiently to generate profit.

The slight decline in ROE from 2022 to 2023 may indicate a decrease in the company's ability to generate profits from its equity. It is essential to investigate the factors contributing to this decline. It could be a result of lower net income, increased shareholder equity, or a combination of both.

Overall, while Pricesmart Inc.'s ROE has been relatively stable over the past five years, the small decline in 2023 suggests the need for further analysis to understand the drivers behind this change. It is important for investors and stakeholders to monitor the company's ROE and its components to assess its financial performance and efficiency in utilizing shareholders' equity for profitability.