Appfolio Inc (APPF)

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	963	-72,370	-11,878	9,783	6,461
Total assets	US$ in thousands	408,889	381,217	408,017	389,480	260,102
Operating ROA		0.24%	-18.98%	-2.91%	2.51%	2.48%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $963K ÷ $408,889K
= 0.24%

Operating return on assets (operating ROA) measures a company's ability to generate operating profits from its assets. A positive operating ROA indicates the company is effectively utilizing its assets to generate profits, while a negative operating ROA suggests inefficiency in asset utilization or operating losses.

Applying the data provided for Appfolio Inc, the company's operating ROA has fluctuated significantly over the past five years. In 2023, the operating ROA improved to 0.24% from a steep decline of -18.98% in 2022. However, it is important to note that the current operating ROA remains relatively low. In 2021, the company reported a negative operating ROA of -2.91%, indicating operating losses relative to its assets. The positive trend from 2020 and 2019, with operating ROA of 2.51% and 2.48% respectively, demonstrates a better operating performance during those periods.

Overall, the analysis of Appfolio Inc's operating ROA suggests that the company has encountered challenges in efficiently utilizing its assets to generate operating profits, as demonstrated by the negative operating ROA in 2021 and the recent modest improvement in 2023. Monitoring this ratio over time can provide insights into the company's operational efficiency and financial performance.