Valaris Ltd (VAL)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 373,400 | 865,400 | 176,500 | -4,493,000 | -4,857,600 |
| Total stockholders’ equity | US$ in thousands | 2,238,500 | 1,987,600 | 1,297,900 | 1,060,800 | 4,374,600 |
| ROE | 16.68% | 43.54% | 13.60% | -423.55% | -111.04% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $373,400K ÷ $2,238,500K
= 16.68%
Valaris Ltd's return on equity (ROE) experienced significant fluctuations over the five-year period from December 31, 2020, to December 31, 2024. In 2020 and 2021, the ROE figures were negative at -111.04% and -423.55% respectively, indicating that the company's net income was insufficient to cover its shareholder's equity, resulting in substantial losses on equity investments.
However, there was a notable turnaround in the company's ROE in 2022, as it improved to 13.60%, indicating that Valaris Ltd generated a positive return for its shareholders during that year. This improvement suggests that the company may have implemented strategies to enhance profitability and effectively utilize shareholder equity.
Subsequently, in 2023 and 2024, the ROE figures continued to show positive momentum, with values of 43.54% and 16.68% respectively. These figures suggest that Valaris Ltd's profitability and efficiency in utilizing shareholder equity improved further during these years, providing a favorable return to its shareholders.
Overall, the trend in Valaris Ltd's ROE indicates a volatile performance in the initial years, followed by a significant improvement in later years. Investors and stakeholders may view this positive trend favourably as it demonstrates the company's ability to generate profits relative to its equity base and potentially create value for its shareholders. However, considering the historical fluctuations, it is essential for investors to closely monitor future ROE performance to assess the company's long-term financial health and sustainability.
Peer comparison
Dec 31, 2024