With its stock down 19% over the past three months, it is easy to disregard GMS (NYSE:GMS). However, stock prices are usually driven by a company’s financial performance over the long term, which in this case looks quite promising. In this article, we decided to focus on GMS’ ROE.
Return on equity or ROE is a key measure used to assess how efficiently a company’s management is utilizing the company’s capital. Simply put, it is used to assess the profitability of a company in relation to its equity capital.
Check out our latest analysis for GMS
Return on equity can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity
So, based on the above formula, the ROE for GMS is:
15% = US$219m ÷ US$1.5b (Based on the trailing twelve months to October 2024).
The ‘return’ is the income the business earned over the last…
