Intercontinental Hotels ()(Ihg) Financials: Return On Equity Compared To Industry Average, Plus Other Key Ratios
Profitability Trend (Last 5 Years)
Profitability - return on equity
This chart shows the historical trend of return on equity for IHG compared to its industry average over the recent years.
Ratio Definition and Interpretation
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', IHG's return on equity was -18.0%, measuring profitability for shareholders. Industry average for Hotels/Resorts in '2021' stood at 11.5%.
• In '2022', IHG's return on equity was -24.2%, measuring profitability for shareholders. The decline from '2021' may indicate some operational or financial challenges. Industry average for Hotels/Resorts in '2022' stood at 25.7%. Industry average increased by 14.2% compared to previous year.
• In '2023', IHG's return on equity was -42.1%, measuring profitability for shareholders. The decline from '2022' may indicate some operational or financial challenges. Industry average for Hotels/Resorts in '2023' stood at 20.2%. Industry average declined by 5.6% from previous year.
• In '2024', IHG's return on equity was -29.5%, measuring profitability for shareholders. The increase since '2023' reflects strengthening financial performance. Industry average for Hotels/Resorts in '2024' stood at -19.2%. Industry average declined by 39.4% from previous year.
Overall, IHG's return on equity has been volatile but showed a downward trend over the past 4 years.
Formula: ROE = Net Income / Shareholders' Equity
Good Range: 10%-20% desirable for many industries.