GOOGL ROE - Return on Equity
Profitability analysis for Alphabet Inc
Stock Price
$335.36
+0.12% today
Return on Equity (ROE)
32.5%
Excellent - Outstanding capital efficiency
Key Profitability Metrics
Return on Equity
32.5%
Profit per dollar of equity
Return on Assets
23.5%
Profit per dollar of assets
Return on Invested Capital
38.2%
Profit per dollar invested
Industry Comparison
GOOGL ROE
32.5%
Communication Services Average
12.0%
Difference
+20.5%
Above industry by 170.8%
GOOGL is outperforming Communication Services peers with superior capital efficiency and profitability.
DuPont Analysis - ROE Breakdown
ROE can be decomposed into three components using the DuPont formula:
ROE = Net Margin × Asset Turnover × Equity Multiplier
Net Profit Margin
28.6%
Strong pricing power
Asset Turnover
0.82x
Capital intensive
Equity Multiplier
0.00x
Conservative
32.5% = 28.6% × 0.82 × 0.00
What ROE Means for Investors
Capital Efficiency
GOOGL's high ROE of 32.5% indicates excellent capital efficiency. Management is generating strong returns on shareholder investments.
Competitive Advantage
Consistently high ROE above industry peers suggests Alphabet Inc has durable competitive advantages like brand strength, pricing power, or operational excellence.
Growth Potential
High ROE companies can fund growth internally by reinvesting profits. GOOGL may not need to raise external capital for expansion, which is investor-friendly.
Leverage Consideration
GOOGL has conservative leverage (0.0x equity multiplier), suggesting the ROE reflects genuine operational efficiency rather than financial engineering.
ROE Calculation Data
Most Recent Quarter
Net Income
$$100.12B
Shareholders Equity
$325.08B
Formula
ROE = (Net Income / Shareholders Equity) × 100
Analyze GOOGL in Depth
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Frequently Asked Questions
What is GOOGL ROE (Return on Equity)?
GOOGL's Return on Equity (ROE) is 32.5%, which is considered excellent. ROE measures how efficiently Alphabet Inc generates profit from shareholders' equity. For every dollar of equity, GOOGL generates 32.5 cents in profit.
Is GOOGL ROE good or bad?
GOOGL's ROE of 32.5% is excellent and above the Communication Services average of approximately 12.0%. Outstanding capital efficiency. GOOGL is outperforming peers by 170.8%.
What is the difference between ROE, ROA, and ROIC?
ROE (Return on Equity) at 32.5% measures returns on shareholder equity. ROA (Return on Assets) at 23.5% measures how efficiently GOOGL uses its total assets. ROIC (Return on Invested Capital) at 38.2% shows returns on all capital invested, including debt. All three metrics help evaluate Alphabet Inc's profitability from different angles.
How does GOOGL generate its ROE?
GOOGL generates its 32.5% ROE through the DuPont formula: Net Margin (28.6%) × Asset Turnover (0.82) × Equity Multiplier (0.00). This shows strong pricing power and cost control, capital-intensive operations, and conservative capital structure.
Should I invest in GOOGL based on ROE?
While GOOGL's ROE of 32.5% is excellent, ROE alone shouldn't determine investment decisions. High ROE can indicate competitive advantages and efficient management. Consider ROE alongside other metrics like debt levels, growth rates, valuation multiples, and industry trends before investing.
What factors affect GOOGL Return on Equity?
GOOGL's ROE is affected by three key drivers: (1) Profitability - net margins from pricing power and cost management, (2) Efficiency - how well Alphabet Inc uses its assets to generate sales, and (3) Leverage - the amount of debt used to finance operations. Communication Services sector dynamics, competitive positioning, management quality, and economic conditions all impact these drivers.
Disclaimer: ROE analysis is based on publicly available financial data and should not be considered financial advice. High ROE can be misleading if driven primarily by excessive leverage. Always analyze multiple metrics and consider your own research before making investment decisions.