Trane Technologies plc (TT)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 2,023,900 | 1,756,500 | 1,423,400 | 854,900 | 1,410,900 |
| Total stockholders’ equity | US$ in thousands | 6,995,200 | 6,088,600 | 6,255,900 | 6,407,700 | 7,267,600 |
| ROE | 28.93% | 28.85% | 22.75% | 13.34% | 19.41% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $2,023,900K ÷ $6,995,200K
= 28.93%
Trane Technologies plc has shown a consistent improvement in its return on equity (ROE) over the past five years. The ROE has increased from 19.41% in 2019 to 28.93% in 2023, indicating a positive trend in the company's ability to generate profits from shareholders' equity.
The significant increase in ROE from 2020 to 2021, jumping from 13.34% to 22.75%, suggests an improvement in the company's efficiency in utilizing equity to generate profits. This may indicate better management of assets and more effective cost controls.
Overall, the steady growth in Trane Technologies' ROE reflects the company's ability to generate increasing returns for its shareholders over the years. This could be attributed to factors such as improved operational performance, effective capital allocation, and strategic decision-making.