Avantor Inc (AVTR)

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	696,400	1,130,200	972,200	706,800	551,800
Total assets	US$ in thousands	12,972,700	13,464,300	13,897,200	9,906,500	9,773,300
Operating ROA		5.37%	8.39%	7.00%	7.13%	5.65%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $696,400K ÷ $12,972,700K
= 5.37%

Operating return on assets (operating ROA) is a key financial ratio that indicates the efficiency of Avantor Inc in generating operating income relative to its total assets. A higher operating ROA suggests better utilization of assets to generate profits.

Examining the trend in Avantor Inc's operating ROA over the past five years, we observe fluctuations in the ratio:

- In 2023, the operating ROA decreased to 5.37% from 8.39% in 2022. This decline may indicate a decrease in operating efficiency or profitability relative to the size of the asset base.
- The 2022 operating ROA at 8.39% demonstrated a strong performance in utilizing assets to generate operating income compared to previous years.
- In 2021 and 2020, the operating ROA remained relatively stable at 7.00% and 7.13%, respectively. This suggests consistent efficiency in generating operating income relative to assets during these years.
- In 2019, the operating ROA was 5.65%, indicating a moderate performance in utilizing assets to generate operating income.

Overall, while there have been fluctuations in operating ROA over the years, Avantor Inc should focus on analyzing the factors driving these changes to improve operating efficiency, enhance profitability, and maximize returns on its asset base in the future.