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Vertiv Holdings Co (NYSE: NYSE:) has posted a Return on Equity (ROE) of 15%, according to data from trailing twelve months up to September 2023. This key financial metric, indicating the effectiveness of capital reinvestment in a company, suggests that Vertiv generated $0.15 profit per $1 of equity. The calculation was based on a net profit of $254 million and shareholders’ equity of $1.7 billion.
While Vertiv’s ROE is slightly below the electrical industry classification average of 16%, it’s important to note that this comparison serves only as a rough performance measure due to variations within the industry.
The company’s debt level is another vital factor when evaluating ROE, as high debt can amplify the ROE and increase default risks. Companies typically finance their expansion by issuing shares, retained earnings, or taking on debt. Although debt can enhance ROE, it also introduces additional risk during turbulent periods or “stormy weather.” Further details about Vertiv’s debt level and associated risks are available on the risks dashboard.
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