B&G Foods Inc (BGS)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	-177,277	80,419	98,628	196,079	276,438
Total assets	US$ in thousands	2,994,050	3,463,290	3,841,610	3,828,540	3,767,570
Operating ROA		-5.92%	2.32%	2.57%	5.12%	7.34%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $-177,277K ÷ $2,994,050K
= -5.92%

Operating Return on Assets (Operating ROA) is a key financial ratio that measures a company's ability to generate operating profits from its assets. Looking at the trend of B&G Foods Inc's Operating ROA from December 31, 2020 to December 31, 2024, several observations can be made:

1. B&G Foods Inc's Operating ROA has shown a declining trend over the period. It decreased from 7.34% in December 2020 to 5.12% in December 2021, further dropping to 2.57% in December 2022, and then to 2.32% in December 2023. The most significant decline was seen in December 2024, where the Operating ROA turned negative at -5.92%.

2. A positive Operating ROA indicates that the company is generating profits from its operating activities relative to its total assets, which is favorable for shareholders and indicates efficient asset utilization. However, a negative Operating ROA, as seen in December 2024, suggests that the company's operating profits were insufficient to cover its assets, signaling potential financial distress and inefficiency.

3. The decreasing trend in Operating ROA over the years could be concerning as it indicates a possible decline in the company's operational efficiency or profitability. Management should investigate the reasons behind this decline and take appropriate actions to improve asset utilization and operational performance.

In conclusion, B&G Foods Inc's Operating ROA has experienced a downward trend, with a sharp decline leading to negative figures in December 2024. This trend calls for a thorough assessment of the company's operations and strategies to enhance profitability and asset utilization in the future.