Advanced Micro Devices Inc (AMD)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	1,900,000	401,000	1,264,000	3,648,000	1,369,000
Total assets	US$ in thousands	69,226,000	67,885,000	67,580,000	12,419,000	8,962,000
Operating ROA		2.74%	0.59%	1.87%	29.37%	15.28%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $1,900,000K ÷ $69,226,000K
= 2.74%

Advanced Micro Devices Inc's operating return on assets (ROA) has shown significant fluctuations over the past five years. In December 2020, the operating ROA was at 15.28%, reflecting a decent profitability on the assets employed in the company's operations.

By December 2021, the operating ROA surged to 29.37%, indicating a substantial improvement in the company's ability to generate profits from its assets. This sharp increase suggests enhanced operational efficiency or increased revenue generation.

However, in December 2022, there was a notable decline in the operating ROA to 1.87%, signaling a considerable drop in profitability relative to the previous year. This decline could be attributed to various factors such as increased operating expenses, declining sales, or inefficiencies in asset utilization.

The downward trend continued into December 2023, with the operating ROA plummeting to 0.59%, indicating further challenges in generating returns on the assets deployed in the business. This significant decrease raises concerns about the company's operational performance and efficiency.

By December 2024, there was a slight improvement in the operating ROA to 2.74%, although it remained relatively low compared to earlier years. This uptick may suggest some recovery in profitability or efficiency measures being implemented by the company.

Overall, the analysis of Advanced Micro Devices Inc's operating ROA highlights the company's performance in utilizing its assets to generate operating profits. The fluctuations observed in the operating ROA over the five-year period indicate varying levels of efficiency, profitability, and operational challenges faced by the company during this time. Continued monitoring and analysis of this metric will be essential for evaluating the company's financial health and performance in the future.