Smith AO Corporation (AOS)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 556,600 | 235,700 | 487,100 | 344,900 | 370,000 |
| Total assets | US$ in thousands | 3,213,900 | 3,332,300 | 3,474,400 | 3,160,700 | 3,058,000 |
| ROA | 17.32% | 7.07% | 14.02% | 10.91% | 12.10% |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $556,600K ÷ $3,213,900K
= 17.32%
A.O. Smith Corp.'s Return on Assets (ROA) has varied over the past five years, ranging from 7.07% in 2022 to 17.32% in 2023. The ROA is a key profitability ratio that measures the company's ability to generate earnings relative to its total assets.
The significant increase in ROA in 2023 compared to 2022 indicates that the company became more efficient in utilizing its assets to generate profits. This could be attributed to improved operational efficiency, effective asset management, or increased revenue generation.
The fluctuation in ROA over the five-year period could suggest varying performance levels in utilizing assets efficiently to generate profits. The ROA of 14.02% in 2021 was higher than the two preceding years but dipped in 2022 before witnessing a substantial increase in 2023.
Overall, A.O. Smith Corp.'s ROA performance demonstrates a mix of efficiency and effectiveness in utilizing its assets to generate profits over the past five years, with the company showing a notable improvement in 2023. It would be beneficial for stakeholders to monitor future ROA trends to assess the company's continued operational performance and asset utilization efficiency.
Peer comparison
Dec 31, 2023