Simulations Plus Inc (SLP)

Return on equity (ROE)

		Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020	Aug 31, 2019
Net income	US$ in thousands	9,961	12,483	9,782	9,332	8,583
Total stockholders’ equity	US$ in thousands	170,029	178,248	165,782	156,035	37,681
ROE		5.86%	7.00%	5.90%	5.98%	22.78%

August 31, 2023 calculation

ROE = Net income ÷ Total stockholders’ equity
= $9,961K ÷ $170,029K
= 5.86%

To analyze Simulations Plus Inc.'s return on equity (ROE) over the past five years, we observe a gradually decreasing trend. In 2019, the ROE was notably high at 22.78%, but it has steadily decreased to 5.86% in 2023. This trend suggests a decline in the company's ability to generate profits from shareholders' equity. A decreasing ROE can indicate inefficiency in the utilization of equity capital to generate profits. For investors, a declining ROE may raise concerns regarding the company's profitability and operational efficiency. Further investigation into the company's financial performance and operational strategies may be warranted to understand the factors contributing to this trend.