Timken Company (TKR)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 352,700 | 408,000 | 407,400 | 369,100 | 284,500 |
| Total stockholders’ equity | US$ in thousands | 2,826,500 | 2,582,400 | 2,268,300 | 2,294,900 | 2,152,900 |
| ROE | 12.48% | 15.80% | 17.96% | 16.08% | 13.21% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $352,700K ÷ $2,826,500K
= 12.48%
Timken Company's return on equity (ROE) has displayed a fluctuating trend over the past five years. The ROE for December 31, 2020, stood at 13.21%, indicating the company generated a return of 13.21% on equity during that period.
Subsequently, Timken Company experienced an improvement in its ROE, reaching 16.08% by December 31, 2021. The upward shift suggests the company enhanced its efficiency in utilizing equity to generate profits during the fiscal year.
By December 31, 2022, Timken Company's ROE further increased to 17.96%, signifying a notable improvement in profitability compared to the previous year. This enhanced return indicates the company's ability to generate increased earnings using shareholders' equity.
However, Timken Company witnessed a slight decline in ROE in the next year, with the ratio decreasing to 15.80% by December 31, 2023. This drop may imply a decrease in the company's profitability relative to the prior year.
Furthermore, by the end of December 31, 2024, the company's ROE fell to 12.48%, representing a significant reduction in profitability compared to the preceding year. This decline in ROE may raise concerns about the company's efficiency in generating profits from shareholders' equity.
In summary, Timken Company's ROE has exhibited fluctuations over the past five years, with periods of improvement followed by declines. It is essential for stakeholders to closely monitor these changes in ROE to assess the company's overall performance and evaluate its ability to generate returns on equity effectively.
Peer comparison
Dec 31, 2024