Copart Inc (CPRT)

Return on assets (ROA)

		Jul 31, 2023	Jul 31, 2022	Jul 31, 2021	Jul 31, 2020	Jul 31, 2019
Net income	US$ in thousands	1,237,740	1,090,130	936,495	699,907	591,693
Total assets	US$ in thousands	6,737,880	5,308,860	4,562,140	3,455,260	2,547,620
ROA		18.37%	20.53%	20.53%	20.26%	23.23%

July 31, 2023 calculation

ROA = Net income ÷ Total assets
= $1,237,740K ÷ $6,737,880K
= 18.37%

Copart, Inc.'s return on assets (ROA) measures the company's efficiency in generating profits relative to its total assets. The trend of Copart's ROA over the past five years provides valuable insights into its operational performance.

In the fiscal year ending July 31, 2023, Copart's ROA stood at 18.37%, indicating that the company generated approximately $0.1837 in net income for every dollar of assets. This represents a slight decrease from the previous year's ROA of 20.53%.

The decline in ROA suggests a potential decrease in profitability relative to the assets employed during the period. Possible factors contributing to this decline could include increased asset base without proportionate growth in net income, higher operating expenses, or lower revenue generation efficiency.

Comparing the 2023 ROA to the prior years, there is a downward trend in performance. The ROA has decreased from 20.53% in 2022 to 18.37% in 2023. This indicates a consistent decline in the company's ability to efficiently use its assets to generate profits over the past two years.

In the context of Copart's historical performance, it's essential to consider the factors that may have contributed to the decrease in ROA. Management changes, competitive pressures, changes in the business model, or macroeconomic factors could all potentially impact the company’s ROA.

Overall, the decreasing trend in ROA warrants further investigation into the company's asset management, cost control, and revenue generation strategies to determine the underlying reasons for the decline and to identify potential areas for improvement.