Xpel Inc (XPEL)
Return on equity (ROE)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 52,800 | 41,381 | 31,567 | 18,282 | 13,978 |
| Total stockholders’ equity | US$ in thousands | 179,989 | 124,722 | 84,462 | 53,382 | 35,062 |
| ROE | 29.34% | 33.18% | 37.37% | 34.25% | 39.87% |
December 31, 2023 calculation
ROE = Net income ÷ Total stockholders’ equity
= $52,800K ÷ $179,989K
= 29.34%
The Return on Equity (ROE) of XPEL Inc has shown a downward trend over the past five years, decreasing from 39.87% in 2019 to 29.34% in 2023. This indicates that the company's ability to generate profit from shareholders' equity has been declining over this period.
While the ROE was relatively high in 2021 at 37.37%, it has since decreased in the subsequent years. This downward trend suggests that the company may be experiencing challenges in efficiently utilizing shareholder equity to generate profits.
It's important for XPEL Inc to closely analyze the factors contributing to the decline in ROE and implement strategic measures to improve this metric. A lower ROE can impact shareholder confidence and potentially affect the company's valuation in the market. Regular monitoring and evaluation of financial performance indicators like ROE are crucial for sustainable business growth and profitability.