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', UNP's return on equity was 46.1%, measuring profitability for shareholders. Industry average for Railroads in '2021' stood at 39.7%.
• In '2022', UNP's return on equity was 53.2%, 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', UNP's return on equity was 47.3%, 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', UNP's return on equity was 42.6%, measuring profitability for shareholders. The decline from '2023' may indicate some operational or financial challenges. Industry average for Railroads in '2024' stood at -33.3%. Industry average declined by 16.1% from previous year.
Overall, UNP's return on equity has consistently declined during the past 4 years.

Formula: ROE = Net Income / Shareholders' Equity

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