Return on Equity (ROE)
since 2005
Calculation
Trane Technologies plc, ROE, long-term trends, calculation
| ROE | = | 100 | × | Net earnings (loss) attributable to Trane Technologies plc1 | ÷ | Total Trane Technologies plc shareholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | 28.85% | = | 100 | × | 1,756,500) | ÷ | 6,088,600) |
| Dec 31, 2021 | 22.75% | = | 100 | × | 1,423,400) | ÷ | 6,255,900) |
| Dec 31, 2020 | 13.34% | = | 100 | × | 854,900) | ÷ | 6,407,700) |
| Dec 31, 2019 | 19.41% | = | 100 | × | 1,410,900) | ÷ | 7,267,600) |
| Dec 31, 2018 | 19.05% | = | 100 | × | 1,337,600) | ÷ | 7,022,700) |
| Dec 31, 2017 | 18.24% | = | 100 | × | 1,302,600) | ÷ | 7,140,300) |
| Dec 31, 2016 | 22.22% | = | 100 | × | 1,476,200) | ÷ | 6,643,800) |
| Dec 31, 2015 | 11.43% | = | 100 | × | 664,600) | ÷ | 5,816,700) |
| Dec 31, 2014 | 15.56% | = | 100 | × | 931,700) | ÷ | 5,987,400) |
| Dec 31, 2013 | 8.75% | = | 100 | × | 618,800) | ÷ | 7,068,900) |
| Dec 31, 2012 | 14.25% | = | 100 | × | 1,018,600) | ÷ | 7,147,800) |
| Dec 31, 2011 | 4.96% | = | 100 | × | 343,200) | ÷ | 6,924,300) |
| Dec 31, 2010 | 8.06% | = | 100 | × | 642,200) | ÷ | 7,964,300) |
| Dec 31, 2009 | 6.35% | = | 100 | × | 451,300) | ÷ | 7,101,800) |
| Dec 31, 2008 | -39.40% | = | 100 | × | (2,624,800) | ÷ | 6,661,400) |
| Dec 31, 2007 | 50.16% | = | 100 | × | 3,966,700) | ÷ | 7,907,900) |
| Dec 31, 2006 | 19.10% | = | 100 | × | 1,032,500) | ÷ | 5,404,800) |
| Dec 31, 2005 | 18.30% | = | 100 | × | 1,054,200) | ÷ | 5,762,000) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
1 US$ in thousands
The financial performance from 2005 to 2022 is characterized by a period of extreme volatility in the first decade, followed by a sustained trend of increasing capital efficiency and profitability. The overall trajectory shows a recovery from a significant deficit in 2008 toward a peak in return on equity by the end of the analyzed period.
- ROE Volatility and Crisis Impact (2005–2011)
- The initial period was marked by sharp fluctuations. A significant peak occurred in 2007, where return on equity reached 50.16%, driven by a surge in net earnings to approximately 3.97 billion US$. This was immediately followed by a severe contraction in 2008, resulting in a net loss of 2.62 billion US$ and a negative ROE of -39.40%. Recovery was gradual, with ROE remaining in the single digits between 2009 and 2011, reflecting a period of instability and earnings recovery.
- Stabilization and Moderate Growth (2012–2015)
- A trend of stabilization emerged starting in 2012, with ROE recovering to 14.25%. While earnings fluctuated during this window, they remained positive, and shareholders' equity began a gradual decline from 7.15 billion US$ in 2012 to 5.82 billion US$ in 2015. This combination of stabilizing earnings and a reduced equity base contributed to a general upward trend in ROE, which reached 15.56% in 2014.
- Capital Efficiency and Expansion (2016–2022)
- The final period demonstrates a strong improvement in profitability and capital utilization. From 2016 to 2019, ROE remained consistently high, fluctuating between 18.24% and 22.22%. Despite a brief decline to 13.34% in 2020, likely coinciding with external economic pressures, a sharp upward trajectory followed. By 2022, ROE reached its highest level since 2007 at 28.85%.
- Analysis of Equity and Earnings Correlation
- A notable pattern is observed in the relationship between net earnings and shareholders' equity. Between 2017 and 2022, shareholders' equity trended downward from 7.14 billion US$ to 6.09 billion US$, while net earnings increased from 1.30 billion US$ to 1.76 billion US$. This divergence indicates that the increase in ROE was driven not only by higher absolute profitability but also by a reduction in the equity base, suggesting a more aggressive and efficient use of shareholder capital to generate returns.
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Comparison to Competitors
Trane Technologies plc, ROE, long-term trends, comparison to competitors
| Trane Technologies plc | Boeing Co. | Caterpillar Inc. | Eaton Corp. plc | GE Aerospace | Honeywell International Inc. | Lockheed Martin Corp. | RTX Corp. | |
|---|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | 28.85% | — | 42.25% | 14.45% | 0.62% | 29.74% | 61.86% | 7.16% |
| Dec 31, 2021 | 22.75% | — | 39.37% | 13.06% | -16.17% | 29.85% | 57.62% | 5.29% |
| Dec 31, 2020 | 13.34% | — | 19.56% | 9.44% | 16.04% | 27.23% | 113.60% | -4.88% |
| Dec 31, 2019 | 19.41% | — | 41.77% | 13.75% | -17.58% | 33.22% | 199.23% | 13.25% |
| Dec 31, 2018 | 19.05% | 3,085.55% | 43.79% | 13.32% | -72.16% | 37.21% | 361.98% | 13.70% |
| Dec 31, 2017 | 18.24% | 2,309.01% | 5.50% | 17.30% | -9.00% | 9.58% | — | 15.37% |
| Dec 31, 2016 | 22.22% | 599.14% | -0.51% | 12.90% | 11.65% | 24.83% | 350.89% | 18.33% |
| Dec 31, 2015 | 11.43% | 81.70% | 14.19% | 13.03% | -6.23% | 26.08% | 116.40% | 27.81% |
| Dec 31, 2014 | 15.56% | 62.85% | 22.06% | 11.36% | 11.89% | 24.01% | 106.29% | 19.93% |
| Dec 31, 2013 | 8.75% | 30.82% | 18.21% | 11.08% | 10.00% | 22.47% | 60.61% | 17.95% |
| Dec 31, 2012 | 14.25% | 66.47% | 32.40% | 8.07% | 11.09% | 22.55% | 7,038.46% | 19.80% |
| Dec 31, 2011 | 4.96% | 114.31% | 38.25% | 18.07% | 12.15% | 19.13% | 265.23% | 22.76% |
| Dec 31, 2010 | 8.06% | 119.56% | 24.94% | 12.62% | 9.79% | 18.96% | 78.91% | 20.45% |
| Dec 31, 2009 | 6.35% | 61.65% | 10.24% | 5.65% | 9.40% | 24.34% | 73.24% | 19.08% |
| Dec 31, 2008 | -39.40% | — | 58.44% | 16.75% | 16.63% | 38.85% | 112.29% | 29.46% |
| Dec 31, 2007 | 50.16% | 45.25% | 39.86% | 19.22% | 19.22% | 26.50% | 30.93% | 19.78% |
| Dec 31, 2006 | 19.10% | 46.74% | 51.57% | 23.14% | 18.55% | 21.43% | 36.74% | 21.58% |
| Dec 31, 2005 | 18.30% | 23.26% | 33.85% | 21.31% | 14.95% | 14.71% | 23.20% | 18.06% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Sector (Capital Goods)
Trane Technologies plc, ROE, long-term trends, comparison to sector (capital goods)
| Trane Technologies plc | Capital Goods | |
|---|---|---|
| Dec 31, 2022 | 28.85% | 13.39% |
| Dec 31, 2021 | 22.75% | 8.48% |
| Dec 31, 2020 | 13.34% | 4.42% |
| Dec 31, 2019 | 19.41% | 18.11% |
| Dec 31, 2018 | 19.05% | 11.28% |
| Dec 31, 2017 | 18.24% | 10.13% |
| Dec 31, 2016 | 22.22% | 20.08% |
| Dec 31, 2015 | 11.43% | 10.42% |
| Dec 31, 2014 | 15.56% | 18.16% |
| Dec 31, 2013 | 8.75% | 15.14% |
| Dec 31, 2012 | 14.25% | 17.58% |
| Dec 31, 2011 | 4.96% | 19.63% |
| Dec 31, 2010 | 8.06% | 15.88% |
| Dec 31, 2009 | 6.35% | 13.47% |
| Dec 31, 2008 | -39.40% | 24.97% |
| Dec 31, 2007 | 50.16% | 22.64% |
| Dec 31, 2006 | 19.10% | 22.16% |
| Dec 31, 2005 | 18.30% | 17.27% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).
Comparison to Industry (Industrials)
Trane Technologies plc, ROE, long-term trends, comparison to industry (industrials)
| Trane Technologies plc | Industrials | |
|---|---|---|
| Dec 31, 2022 | 28.85% | 15.38% |
| Dec 31, 2021 | 22.75% | 15.38% |
| Dec 31, 2020 | 13.34% | 0.24% |
| Dec 31, 2019 | 19.41% | 14.56% |
| Dec 31, 2018 | 19.05% | 17.95% |
| Dec 31, 2017 | 18.24% | 18.24% |
| Dec 31, 2016 | 22.22% | 21.69% |
| Dec 31, 2015 | 11.43% | 16.11% |
| Dec 31, 2014 | 15.56% | 19.68% |
| Dec 31, 2013 | 8.75% | 16.40% |
| Dec 31, 2012 | 14.25% | 17.20% |
| Dec 31, 2011 | 4.96% | 20.10% |
| Dec 31, 2010 | 8.06% | 16.41% |
| Dec 31, 2009 | 6.35% | 12.84% |
| Dec 31, 2008 | -39.40% | 20.74% |
| Dec 31, 2007 | 50.16% | 20.36% |
| Dec 31, 2006 | 19.10% | 32.16% |
| Dec 31, 2005 | 18.30% | 7.80% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31), 10-K (reporting date: 2010-12-31), 10-K (reporting date: 2009-12-31), 10-K (reporting date: 2008-12-31), 10-K (reporting date: 2007-12-31), 10-K (reporting date: 2006-12-31), 10-K (reporting date: 2005-12-31).