United Parcel Service Inc (UPS)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 5,782,000 | 6,708,000 | 11,548,000 | 12,890,000 | 1,343,000 |
| Total stockholders’ equity | US$ in thousands | 16,718,000 | 17,306,000 | 19,786,000 | 14,253,000 | 741,000 |
| ROE | 34.59% | 38.76% | 58.36% | 90.44% | 181.24% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $5,782,000K ÷ $16,718,000K
= 34.59%
United Parcel Service Inc's return on equity (ROE) has shown a declining trend over the five-year period from December 31, 2020, to December 31, 2024. The ROE decreased significantly from 181.24% in 2020 to 90.44% in 2021, and continued to decline to 58.36% in 2022, 38.76% in 2023, and 34.59% in 2024.
This decline in ROE indicates that the company's ability to generate profits from shareholders' equity has weakened over the years. A falling ROE could be a result of various factors, including increased levels of debt, lower profitability, or inefficient utilization of assets.
Investors and analysts may view this declining trend as a cause for concern, as it suggests a potential deterioration in the company's overall financial performance and efficiency in utilizing shareholder funds. Further analysis of the company's financial statements and operations may be necessary to understand the underlying reasons for the diminishing ROE and to evaluate the company's future prospects.