Best Buy Co. Inc (BBY)
Operating return on assets (Operating ROA)
| Feb 1, 2025 | Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,262,000 | 1,574,000 | 1,795,000 | 3,039,000 | 2,391,000 |
| Total assets | US$ in thousands | 14,782,000 | 14,967,000 | 15,803,000 | 17,504,000 | 19,067,000 |
| Operating ROA | 8.54% | 10.52% | 11.36% | 17.36% | 12.54% |
February 1, 2025 calculation
Operating ROA = Operating income ÷ Total assets
= $1,262,000K ÷ $14,782,000K
= 8.54%
The operating return on assets (Operating ROA) of Best Buy Co. Inc has displayed fluctuations over the past five years, ranging from 8.54% as of February 1, 2025, to a peak of 17.36% as of January 29, 2022. This metric indicates the company's ability to generate profits from its assets before interest and taxes.
The decline in Operating ROA from 17.36% in January 29, 2022, to 8.54% in February 1, 2025, suggests a reduction in the efficiency of utilizing assets to generate operating income. A lower Operating ROA could be attributed to factors such as increased operating expenses, lower sales volume, or decreased asset productivity.
It is essential for Best Buy Co. Inc to closely monitor its Operating ROA trend and analyze the underlying factors affecting this performance metric to ensure optimal asset utilization and sustainable profitability in the long run.