United Parcel Service Inc (UPS)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 6,708,000 | 11,548,000 | 12,890,000 | 1,343,000 | 4,440,000 |
| Total stockholders’ equity | US$ in thousands | 17,306,000 | 19,786,000 | 14,253,000 | 657,000 | 3,267,000 |
| ROE | 38.76% | 58.36% | 90.44% | 204.41% | 135.90% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $6,708,000K ÷ $17,306,000K
= 38.76%
United Parcel Service, Inc.'s return on equity (ROE) has exhibited fluctuations over the past five years. In 2023, the ROE decreased to 38.76% from 58.36% in 2022, indicating a decline in the company's ability to generate profit from shareholders' equity. This may raise concerns about the company's operational efficiency and profitability.
Compared to the ROE of 90.44% in 2021, the significant drop in 2023 suggests a substantial decrease in the company's profitability and effectiveness in utilizing shareholders' equity to generate earnings. The ROE in 2023 is notably lower than the very high levels seen in 2020 (204.41%) and 2019 (135.90%), indicating a significant decline in the company's profitability over the past three years.
The downward trend in ROE over the years may indicate potential challenges or inefficiencies in United Parcel Service, Inc.'s operations and management of assets and liabilities. Further analysis is recommended to identify the underlying reasons behind the declining ROE and to determine appropriate strategies to improve the company's profitability and efficiency.