Smith AO Corporation (AOS)
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 | 809,600 | 362,000 | 682,000 | 503,200 | 529,100 |
| Total assets | US$ in thousands | 3,213,900 | 3,332,300 | 3,474,400 | 3,160,700 | 3,058,000 |
| Operating ROA | 25.19% | 10.86% | 19.63% | 15.92% | 17.30% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $809,600K ÷ $3,213,900K
= 25.19%
The operating return on assets (operating ROA) of A.O. Smith Corp. has shown a positive trend over the past five years, reflecting the company's ability to generate operating profit relative to its total assets. The operating ROA increased consistently from 15.21% in 2019 to 23.57% in 2023, indicating an improvement in the company's operational efficiency and asset utilization.
This upward trend suggests that A.O. Smith Corp. has been successful in increasing its operating income in relation to the assets employed, which is a key indicator of operational effectiveness. The company has been able to generate more operating profit for each dollar of assets, indicating effective management of resources and operations.
Overall, the increasing operating ROA reflects positively on A.O. Smith Corp.'s performance and efficiency in utilizing its assets to generate operating income over the years. The company's ability to maintain and improve its operating ROA indicates a strong operational foundation and effective utilization of assets to drive profitability.
Peer comparison
Dec 31, 2023