Chesapeake Energy Corp (CHK)

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	3,142,000	3,780,000	938,000	-8,703,000	-31,000
Total assets	US$ in thousands	14,376,000	15,468,000	11,009,000	6,584,000	16,193,000
Operating ROA		21.86%	24.44%	8.52%	-132.18%	-0.19%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $3,142,000K ÷ $14,376,000K
= 21.86%

Chesapeake Energy Corp's operating return on assets (ROA) has varied significantly over the past five years. In 2023, the company's operating ROA improved to 21.86%, compared to 24.44% in 2022. This indicates that the company generated 21.86 cents of operating income for every dollar of assets employed in its operations in 2023.

The sharp increase in operating ROA from 2022 to 2023 suggests improved operational efficiency or profitability during the most recent period. However, these improvements should be further analyzed to determine the specific factors driving the increase, such as cost management, revenue growth, or changes in asset utilization.

In contrast, Chesapeake Energy Corp experienced a substantial decline in operating ROA in 2021 to 8.52%, a significant drop from the negative 132.18% in 2020. This negative figure in 2020 indicates that the company incurred operating losses greater than the value of its assets, which is a concerning sign for investors and creditors. The negative operating ROA in 2020 may have been influenced by various factors, such as impairment charges, restructuring costs, or operational inefficiencies.

Overall, Chesapeake Energy Corp's operating ROA has exhibited volatility in recent years, indicating fluctuations in its operational performance and asset utilization. Investors and stakeholders should closely monitor the trend in operating ROA to assess the company's profitability and efficiency in utilizing its assets effectively.