Advance Auto Parts Inc (AAP)
Operating return on assets (Operating ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 114,377 | 670,253 | 838,717 | 749,907 | 677,180 |
| Total assets | US$ in thousands | 12,276,300 | 11,986,400 | 12,194,200 | 11,839,600 | 11,248,500 |
| Operating ROA | 0.93% | 5.59% | 6.88% | 6.33% | 6.02% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $114,377K ÷ $12,276,300K
= 0.93%
Operating Return on Assets (Operating ROA) measures a company's efficiency in generating operating profits relative to its total assets. A higher Operating ROA indicates better operating performance utilizing the assets at hand.
Based on the data provided for Advance Auto Parts Inc, there has been a fluctuation in the Operating ROA over the past five years. In 2019, the company achieved an Operating ROA of 6.02%, which increased to 6.33% in 2020, demonstrating improved efficiency in generating operating profits relative to its assets. However, there was a decline in 2021 to 6.88%, followed by a further drop to 5.59% in 2022, indicating potential operational challenges or changes impacting profitability.
The most recent data for December 31, 2023, shows a significant decrease in Operating ROA to 0.93%, suggesting a notable decline in operating performance efficiency compared to the previous years. This decline may raise concerns about the company's ability to generate operating profits from its assets effectively.
It is essential for Advance Auto Parts Inc to analyze the factors contributing to the decrease in Operating ROA and implement strategies to improve operational efficiency and profitability to enhance overall financial performance.
Peer comparison
Dec 31, 2023