Vertex Pharmaceuticals Inc (VRTX)

Return on equity (ROE)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Net income	US$ in thousands	-535,600	3,619,600	3,322,000	2,342,100	2,711,700
Total stockholders’ equity	US$ in thousands	16,409,600	17,580,400	13,912,700	10,100,000	8,686,800
ROE		-3.26%	20.59%	23.88%	23.19%	31.22%

December 31, 2024 calculation

ROE = Net income ÷ Total stockholders’ equity
= $-535,600K ÷ $16,409,600K
= -3.26%

Vertex Pharmaceuticals Inc's return on equity (ROE) has shown a decreasing trend over the five-year period from 2020 to 2024. The ROE was relatively high at 31.22% in 2020, indicating that the company generated $0.3122 in profit for every $1 of shareholder equity. However, this ratio decreased to 23.19% in 2021 and further to 23.88% in 2022.

Although the ROE remained above 20% in 2023 at 20.59%, it dropped significantly to -3.26% in 2024, indicating that the company incurred a loss relative to its shareholder equity. This negative ROE in 2024 may raise concerns among investors and stakeholders as it suggests that overall profitability has deteriorated.

The declining trend in ROE over the five-year period may indicate challenges in effectively utilizing the company's equity to generate returns for shareholders. It is essential for Vertex Pharmaceuticals Inc to analyze the underlying causes of this downward trend and take strategic actions to improve its profitability and efficiency in the utilization of equity.