Walgreens Boots Alliance Inc (WBA)
Return on equity (ROE)
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -3,080,000 | 4,337,000 | 2,542,000 | 456,000 | 3,982,000 |
| Total stockholders’ equity | US$ in thousands | 20,020,000 | 25,275,000 | 23,419,000 | 20,637,000 | 23,512,000 |
| ROE | -15.38% | 17.16% | 10.85% | 2.21% | 16.94% |
August 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $-3,080,000K ÷ $20,020,000K
= -15.38%
Return on Equity (ROE) is a key financial metric that measures the profitability of a company relative to the equity invested by shareholders. Analyzing the ROE of Walgreens Boots Alliance Inc over the past five years provides valuable insights into the company's efficiency in utilizing shareholder's equity to generate profits.
In 2023, Walgreens Boots Alliance Inc reported a negative ROE of -15.38%, indicating that the company experienced a reduction in profitability relative to the shareholder's equity. This negative return suggests that the company's net income was insufficient to cover the shareholder's equity, which may raise concerns for investors.
In contrast, the ROE in 2022 stood at 17.16%, signifying a strong performance in generating profits from shareholders' equity. This reflects positively on the company's ability to deliver returns to its shareholders for that year.
The ROE in 2021 was 10.85%, indicating a solid performance that year, although it was lower than the previous year. This could suggest a potential dip in profit generation relative to shareholder's equity.
In 2020, the ROE was at 2.21%, representing a modest performance in generating profits compared to the shareholder's equity. This relatively low ROE might indicate challenges in utilizing equity effectively to produce returns for shareholders.
Finally, in 2019, the ROE was recorded at 16.94%, demonstrating another strong performance in profitability relative to the equity invested by shareholders, suggesting that the company was effectively utilizing its equity to generate profits.
In summary, the trend in Walgreens Boots Alliance Inc's ROE reveals fluctuations in its profitability relative to shareholders' equity over the past five years. The negative ROE in 2023 could raise concerns, while the fluctuating ROE in the previous years suggests that the company's ability to generate profits from shareholders' equity has varied. Analysts and investors should consider these fluctuations in evaluating the company's financial performance and financial efficiency.
Peer comparison
Aug 31, 2023