Shake Shack Inc (SHAK)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 20,264 | -21,229 | -8,655 | -42,158 | 19,827 |
| Total stockholders’ equity | US$ in thousands | 443,417 | 412,204 | 409,537 | 407,321 | 298,817 |
| ROE | 4.57% | -5.15% | -2.11% | -10.35% | 6.64% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $20,264K ÷ $443,417K
= 4.57%
Shake Shack Inc's return on equity (ROE) has fluctuated over the past five years, showcasing a mix of positive and negative trends. In 2023, the ROE stood at 4.57%, representing an improvement from the negative ROE figures observed in the two preceding years. This suggests that the company was able to generate a modest return for its shareholders in 2023.
The negative ROE in 2022 and 2021 (-5.15% and -2.11% respectively) indicates that Shake Shack struggled to create value from shareholders' equity during these periods. It is noteworthy that the ROE improved from 2021 to 2022, signaling a positive trend even though it remained negative.
In 2020, Shake Shack's ROE was particularly low at -10.35%, indicating significant challenges in utilizing shareholder equity effectively to generate profits. However, the company showed a strong ROE of 6.64% in 2019, signifying a more successful deployment of equity to generate returns.
Overall, the erratic nature of Shake Shack Inc's ROE over the past five years suggests some volatility in the company's profitability and efficiency in utilizing shareholder equity. Further analysis would be necessary to determine the underlying factors driving these fluctuations and to assess the company's long-term sustainability and growth prospects.
Peer comparison
Dec 31, 2023