Cadence Design Systems Inc (CDNS)
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 | 1,350,760 | 1,251,220 | 1,073,690 | 779,089 | 645,552 |
| Total assets | US$ in thousands | 8,974,480 | 5,669,490 | 5,137,070 | 4,386,300 | 3,950,780 |
| Operating ROA | 15.05% | 22.07% | 20.90% | 17.76% | 16.34% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $1,350,760K ÷ $8,974,480K
= 15.05%
Based on the data provided, Cadence Design Systems Inc's operating return on assets (operating ROA) has shown a generally positive trend over the five-year period from 2020 to 2024. The operating ROA increased from 16.34% in 2020 to 22.07% in 2023, indicating an improvement in the company's ability to generate operating income from its assets.
However, in 2024, the operating ROA declined to 15.05%, which could be a cause for concern as it represents a decrease in the efficiency of utilizing assets to generate operating income. It would be important for stakeholders to investigate the factors behind this decline in operating ROA and assess whether it is a temporary fluctuation or a trend that may impact the company's profitability in the future.
Overall, the positive trend in operating ROA over the four-year period suggests that Cadence Design Systems Inc has been effectively managing its assets to generate operating income, but the recent decline in 2024 warrants further analysis and attention.
Peer comparison
Dec 31, 2024