Warner Music Group (WMG)
Return on equity (ROE)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 430,000 | 551,000 | 304,000 | -475,000 | 256,000 |
| Total stockholders’ equity | US$ in thousands | 307,000 | 152,000 | 31,000 | -63,000 | -289,000 |
| ROE | 140.07% | 362.50% | 980.65% | — | — |
September 30, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $430,000K ÷ $307,000K
= 140.07%
Warner Music Group's return on equity (ROE) has shown significant fluctuations over the past five years. In 2023, the ROE stands at 140.07%, a notable decrease from the previous year's figure of 362.50%. The substantial drop in ROE indicates a decrease in the company's ability to generate profit from shareholders' equity.
Comparing the current ROE to the exceptional performance in 2021, where it reached 980.65%, Warner Music Group has experienced a sharp decline in profitability efficiency. It is worth noting that in 2020 and 2019, ROE data is not available, which limits the ability to assess the trend over a longer period.
The recent decrease in ROE may indicate increased financial leverage or lower net income relative to shareholders' equity. Warner Music Group should conduct a thorough analysis of its financial performance to identify the factors contributing to the decline in ROE and implement strategies to improve profitability and efficiency in utilizing shareholders' equity.
Peer comparison
Sep 30, 2023