Colgate-Palmolive Company (CL)

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	4,268,000	3,984,000	2,893,000	3,332,000	3,885,000
Total assets	US$ in thousands	16,046,000	16,393,000	15,731,000	15,040,000	15,920,000
Operating ROA		26.60%	24.30%	18.39%	22.15%	24.40%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $4,268,000K ÷ $16,046,000K
= 26.60%

Operating ROA is a key financial ratio that measures a company's efficiency in generating profits from its assets used in its core operations. Colgate-Palmolive Company's Operating ROA has shown fluctuation over the past five years.

In 2020, the company had an impressive Operating ROA of 24.40%, indicating that for every dollar of assets employed in its operations, it generated a profit of 24.40 cents. However, this ratio slightly decreased to 22.15% in 2021 and further dropped to 18.39% in 2022, possibly suggesting challenges in efficiently utilizing its assets to generate profits during those years.

The trend reversed in 2023, with Operating ROA improving to 24.30% and surging to 26.60% in 2024, showcasing a significant enhancement in the company's operational efficiency and profitability in utilizing its assets effectively to drive earnings.

Overall, Colgate-Palmolive Company's Operating ROA demonstrates variability over the years, but the recent significant improvement in 2024 indicates a positive trend in the company's ability to generate profits from its operational assets. It is important for investors and stakeholders to monitor this ratio to assess the company's operational performance and efficiency in utilizing its assets effectively.