Watsco Inc (WSO)
Return on equity (ROE)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 536,286 | 536,337 | 601,167 | 418,945 | 269,579 |
| Total stockholders’ equity | US$ in thousands | 2,656,990 | 2,229,840 | 1,889,240 | 1,664,950 | 1,486,680 |
| ROE | 20.18% | 24.05% | 31.82% | 25.16% | 18.13% |
December 31, 2024 calculation
ROE = Net income ÷ Total stockholders’ equity
= $536,286K ÷ $2,656,990K
= 20.18%
Based on the provided data, Watsco Inc's Return on Equity (ROE) has shown a positive trend over the past five years.
- As of December 31, 2020, the ROE was 18.13%, indicating that for every dollar of shareholder equity, the company generated a return of 18.13%.
- The ROE increased to 25.16% by December 31, 2021, reflecting an improvement in the company's ability to generate profit from shareholder equity.
- By December 31, 2022, the ROE further increased to 31.82%, reaching its peak over the period analyzed. This signifies a strong performance in utilizing shareholder funds to generate profits.
- However, by December 31, 2023, the ROE decreased to 24.05%, indicating a slight decline in the company's profitability relative to its equity.
- The downward trend continued as of December 31, 2024, with the ROE decreasing to 20.18%. While still positive, this suggests a further decrease in the company's ability to generate returns for its shareholders.
In conclusion, Watsco Inc's ROE has displayed fluctuations over the past five years, with an overall increasing trend followed by a subsequent decline. It is important for the company to closely monitor and analyze the factors affecting its ROE to sustain and enhance shareholder value in the future.