Mcgrath Rentcorp(Mgrc) 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 MGRC 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', MGRC's return on equity was 12.2%, measuring profitability for shareholders. Industry average for Diversified Commercial Services in '2021' stood at 18.9%.
• In '2022', MGRC's return on equity was 15.0%, measuring profitability for shareholders. The increase since '2021' reflects strengthening financial performance. Industry average for Diversified Commercial Services in '2022' stood at -0.9%. Industry average declined by 19.8% from previous year.
• In '2023', MGRC's return on equity was 20.1%, measuring profitability for shareholders. The increase since '2022' reflects strengthening financial performance. Industry average for Diversified Commercial Services in '2023' stood at 2.9%. Industry average increased by 3.8% compared to previous year.
• In '2024', MGRC's return on equity was 22.5%, measuring profitability for shareholders. The increase since '2023' reflects strengthening financial performance. Industry average for Diversified Commercial Services in '2024' stood at 29.2%. Industry average increased by 26.3% compared to previous year.
Overall, MGRC's return on equity has been volatile but showed an upward trend over the past 4 years.
Formula: ROE = Net Income / Shareholders' Equity
Good Range: 10%-20% desirable for many industries.