ABM Industries Incorporated (ABM)

Operating return on assets (Operating ROA) is a key financial ratio that measures a company's ability to generate operating profit from its assets. It is calculated by dividing operating income by average total assets.

Based on the data provided, ABM Industries Inc.'s operating ROA has fluctuated over the past five years. In 2023, the operating ROA was 8.30%, an increase from the previous year's 7.16%. This indicates that the company generated approximately 8.30 cents of operating income for every dollar of average total assets during the year. This improvement suggests that the company's operational efficiency and profitability from its asset base have increased, resulting in a more effective utilization of its assets to generate operating income.

Comparing this to 2021 and 2019, where the operating ROA was 4.65% and 5.95% respectively, there has been a notable increase in the company's ability to generate operating income from its assets in 2023. However, the operating ROA was higher in 2020, at 7.31%, indicating a temporary decrease in the effectiveness of asset utilization in 2021 before the subsequent recovery in 2023.

In summary, the upward trend in ABM Industries Inc.'s operating ROA from 2019 to 2023 reflects improvements in the company's operational efficiency and profitability from its asset base. This suggests that the company has been able to enhance its ability to generate operating income relative to its asset base over the years, which can be viewed positively by investors and analysts as an indicator of effective asset management and operational performance.

Peer comparison

Oct 31, 2023