Norfolk Southern(Nsc) 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 NSC 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', NSC's return on equity was 22.0%, measuring profitability for shareholders. Industry average for Railroads in '2021' stood at 39.7%.
• In '2022', NSC's return on equity was 24.8%, measuring profitability for shareholders. The increase since '2021' reflects strengthening financial performance. Industry average for Railroads in '2022' stood at 46.1%. Industry average increased by 6.4% compared to previous year.
• In '2023', NSC's return on equity was 14.3%, measuring profitability for shareholders. The decline from '2022' may indicate some operational or financial challenges. Industry average for Railroads in '2023' stood at -17.2%. Industry average declined by 63.3% from previous year.
• In '2024', NSC's return on equity was 19.4%, measuring profitability for shareholders. The increase since '2023' reflects strengthening financial performance. Industry average for Railroads in '2024' stood at -33.3%. Industry average declined by 16.1% from previous year.
Overall, NSC'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.