UGI Corporation (UGI)
Return on equity (ROE)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -1,502,000 | 1,073,000 | 1,467,000 | 532,000 | 256,000 |
| Total stockholders’ equity | US$ in thousands | 4,386,000 | 6,066,000 | 5,522,000 | 4,128,000 | 3,817,000 |
| ROE | -34.25% | 17.69% | 26.57% | 12.89% | 6.71% |
September 30, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-1,502,000K ÷ $4,386,000K
= -34.25%
Based on the data provided, UGI Corp.'s return on equity (ROE) has demonstrated significant variability over the past five years. ROE is a measure of a company's profitability and efficiency in utilizing shareholder equity to generate profits.
In 2019, the ROE was 6.71%, indicating that for every dollar of equity, the company generated a return of 6.71%. There was a noticeable improvement in 2020, with ROE increasing to 12.89%, reflecting a stronger performance in utilizing shareholder equity to generate profits.
Subsequently, in 2021, UGI Corp.'s ROE saw a substantial increase to 26.57%, indicating a significant improvement in the company's ability to generate profits from shareholder equity. This surge in ROE suggests a more efficient use of equity to drive profitability.
However, this positive trend was reversed in 2022, as the ROE dropped to 17.69%. Despite the decrease, the ROE remained at a relatively healthy level, indicating that the company continued to generate profits from its equity base.
The most recent data, for the period ending September 30, 2023, reflects a notable decrease in ROE to -34.25%, signifying a negative return on equity. This development raises concerns about the company's ability to effectively utilize equity to generate profits.
The substantial variation in UGI Corp.'s ROE over the years suggests fluctuations in the company's profitability and efficiency in utilizing equity. The sharp decline in ROE in 2023 warrants further investigation to identify the underlying causes and assess the long-term implications for the company's financial performance.
Overall, the analysis of UGI Corp.'s ROE demonstrates the importance of evaluating trends over multiple years to gain a deeper understanding of the company's financial performance and to identify potential areas for improvement.
Peer comparison
Sep 30, 2023