Autoliv Inc (ALV)
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 | 690,000 | 659,000 | 675,000 | 382,000 | 726,000 |
| Total assets | US$ in thousands | 8,332,000 | 7,717,000 | 7,537,000 | 8,157,000 | 6,771,200 |
| Operating ROA | 8.28% | 8.54% | 8.96% | 4.68% | 10.72% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $690,000K ÷ $8,332,000K
= 8.28%
Operating return on assets (Operating ROA) is a key financial ratio that measures a company's efficiency in generating operating income from its assets. It indicates how well a company is utilizing its assets to generate profit from its core operations.
Autoliv Inc.'s Operating ROA has varied over the past five years, ranging from a low of 5.79% in 2020 to a high of 11.35% in 2019. The trend shows fluctuations in performance, with a notable increase in 2019 followed by a dip in 2020 before a recovery and further improvement in subsequent years.
The significant increase in Operating ROA in 2019 suggests that Autoliv Inc. made effective use of its assets to generate operating income during that period. This could be attributed to improved operational efficiency, higher sales volume, cost control measures, or a combination of these factors. However, the subsequent decline in 2020 indicates possible challenges or changes in the company's operations or market conditions.
The steady increase in Operating ROA from 2020 to 2023 demonstrates Autoliv Inc.'s efforts to enhance asset utilization and operating efficiency over the recent years. This positive trend indicates that the company has been able to generate more operating income relative to its assets, which is a favorable indicator of financial performance.
Overall, Autoliv Inc.'s Operating ROA performance reflects a mix of strengths and challenges in asset management and operational efficiency during the analyzed period. Continued monitoring of this ratio will be essential to assess the company's ability to sustain and further improve its profitability in the future.
Peer comparison
Dec 31, 2023