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Return on Common Equity for Arrow Electronics Inc

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ARW: Arrow Electronics Inc

Arrow Electronics, Inc. provides products, services, and solutions to industrial and commercial users of electronic components and enterprise computing solutions in the Americas, Europe, the Middle Ea...

104.40 USD
Price
USD
Fair Value
Upside
101.78 - 137.80
52-week range

Analysis

Benchmarks

Metric Usage: Return on Common Equity

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roe
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number
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text
Format
current
Default Period
FY, LTM
Periods Supported
Free
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Return on Common Equity

A ratio used to measure the return that a firm generates on the book value of common equity.

Definition of Return on Common Equity

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Return on Common Equity is defined as:

Return on Common Equity = Net Income To Common / Average Total Common Equity

Return on Common Equity for Arrow Electronics is calculated as follows:

Net Income [ 392.1 M ]
(/) Average Equity over Period [ 5.783 B ]
(=) Return on Common Equity [ 6.8% ]

The tables below summarizes the trend in Arrow Electronics’s return on common equity over the last five years:

Fiscal Year Net Income Average Common Equity Return on Common Equity
2020-12-31 584.4 M 4.951 B 11.8%
2021-12-31 1.108 B 5.186 B 21.4%
2022-12-31 1.427 B 5.414 B 26.4%
2023-12-31 903.5 M 5.676 B 15.9%
2024-12-31 392.1 M 5.783 B 6.8%

Return on equity represents the percentage return a company generates on the money shareholders have invested.

The Net Income used in the numerator is often adjusted for one-time and non-recurring items to present a clearer view of future earnings. Since income is earned over the course of a year, we average book value of Common Equity at the start and end of the year for the denominator.

In general, a higher return on equity suggests management is utilizing the capital invested by shareholders efficiently.


Click the link below to download a spreadsheet with an example Return on Common Equity calculation for Arrow Electronics Inc below:

Sector Benchmark Analysis

Sector
Industry Group
Industry
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-877.4%-577.4%-277.4%81.6%0400800

The chart above depicts the distribution of return on common equity for companies operating in the Information Technology sector in the Developed economic region. Over 2,320 companies were considered in this analysis, and 2,229 had meaningful values. The average return on common equity of companies in the sector is -26.7% with a standard deviation of 98.7%.

Arrow Electronics Inc's Return on Common Equity of 6.8% ranks in the 58.7% percentile for the sector. The following table provides additional summary stats:

Return on Common Equity In The Information Technology Sector
Economic Risk RegionDeveloped
Total Constituents2,321
Included Constituents2,229
Min-916.8%
Max62.3%
Median3.2%
Mean-26.7%
Standard Deviation98.7%

You can find companies with similar return on common equity using this stock screener.

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