Name: Return on Equity (ROE)

Definition: ROE shows how much profit the company earns for its shareholders based on their invested equity. It’s one of the most watched profitability ratios. A consistently high ROE signals strong management and efficient use of shareholder capital. But artificially high ROE may sometimes be boosted by excessive debt.

Interpretation:
• In '2021', DEO's return on equity was 38.6%, measuring profitability for shareholders. Industry average for Beverages (Production/Distribution) in '2021' stood at -19.6%.
• In '2022', DEO's return on equity was 41.5%, measuring profitability for shareholders. The increase since '2021' reflects strengthening financial performance. Industry average for Beverages (Production/Distribution) in '2022' stood at -18.5%. Industry average increased by 1.0% compared to previous year.
• In '2023', DEO's return on equity was 46.0%, measuring profitability for shareholders. The increase since '2022' reflects strengthening financial performance. Industry average for Beverages (Production/Distribution) in '2023' stood at -14.5%. Industry average increased by 4.0% compared to previous year.
• In '2024', DEO's return on equity was 38.9%, measuring profitability for shareholders. The decline from '2023' may indicate some operational or financial challenges. Industry average for Beverages (Production/Distribution) in '2024' stood at -31.6%. Industry average declined by 17.0% from previous year.
Overall, DEO's return on equity has remained generally stable over the past 4 years.

Formula: ROE = Net Income / Shareholders' Equity

Good Range: 10%-20% desirable for many industries.