Terex Corporation (TEX)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 518,000 | 300,000 | 220,900 | -10,600 | 54,400 |
| Total stockholders’ equity | US$ in thousands | 1,672,300 | 1,181,200 | 1,109,600 | 921,500 | 932,300 |
| ROE | 30.98% | 25.40% | 19.91% | -1.15% | 5.84% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $518,000K ÷ $1,672,300K
= 30.98%
Terex Corp.'s return on equity (ROE) has exhibited a positive trend in recent years, with a notable increase from -1.15% in 2020 to 30.98% in 2023. The substantial growth in ROE signifies the company's ability to generate greater profits from shareholders' equity investment. This improvement reflects positively on Terex's efficiency in utilizing equity to generate earnings.
The fluctuation in ROE from negative in 2020 to positive in subsequent years indicates a potential recovery and strategic realignment within the company. The positive ROE figures in the recent years (2021, 2022, and 2023) suggest that Terex Corp. has been more effective in generating profits relative to the shareholders' equity invested.
Overall, the increasing trend in ROE for Terex Corp. reflects positively on the company's financial performance and efficiency in leveraging equity to enhance shareholder value. This trend suggests an improvement in operational efficiency, profitability, and potentially strategic decision-making, which may have positively impacted the company's financial health and market position.