Unifirst Corporation (UNF)
Return on equity (ROE)
| Aug 26, 2023 | Aug 27, 2022 | Aug 28, 2021 | Aug 29, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 103,674 | 103,404 | 151,111 | 135,770 | 179,134 |
| Total stockholders’ equity | US$ in thousands | 2,003,960 | 1,915,870 | 1,872,950 | 1,741,130 | 1,641,230 |
| ROE | 5.17% | 5.40% | 8.07% | 7.80% | 10.91% |
August 26, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $103,674K ÷ $2,003,960K
= 5.17%
The return on equity (ROE) is a key financial ratio that measures a company's ability to generate profits from its shareholders' equity. It provides insights into how effectively a company is using its equity to generate returns.
Analyzing the ROE trend of Unifirst Corp. over the past five years reveals some interesting insights into the company's performance.
The ROE has exhibited a declining trend from 10.91% in 2019 to 5.17% in 2023. This declining trend indicates a reduction in the company's ability to generate profits from the shareholders' equity over this period.
Several factors may have contributed to this decline in ROE. It could be attributed to an increase in the company's equity base without a corresponding increase in net income. Alternatively, the company's net income may have decreased, while the equity base remained relatively stable or increased.
A low ROE may also indicate inefficient utilization of shareholders' funds and potential concerns regarding the company's profitability and operational efficiency.
As a financial analyst, it would be important to delve deeper into the company's financial statements and performance indicators to identify the specific drivers behind the declining ROE. This could involve further analysis of the company's net income, equity structure, asset utilization, and cost management.
Overall, the declining trend in Unifirst Corp.'s ROE highlights the importance of a comprehensive assessment of the company's financial health and operational efficiency. Identifying the underlying reasons for the decline in ROE will be crucial for potential investors and stakeholders to assess the company's long-term sustainability and profitability.
Peer comparison
Aug 26, 2023