Darling Ingredients Inc (DAR)
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 | 949,726 | 1,029,070 | 884,470 | 430,936 | 475,821 |
| Total assets | US$ in thousands | 11,061,100 | 9,202,370 | 6,133,730 | 5,613,330 | 5,345,260 |
| Operating ROA | 8.59% | 11.18% | 14.42% | 7.68% | 8.90% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $949,726K ÷ $11,061,100K
= 8.59%
Operating return on assets (operating ROA) is a key financial ratio that measures a company's operating performance efficiency in generating profits from its assets.
Darling Ingredients Inc's operating ROA has shown variability over the past five years. The trend indicates a decrease from 14.42% in 2021 to 8.59% in 2023, with a notable peak in 2022 at 11.18%. This shift may suggest fluctuations in the company's ability to generate operating income relative to its total assets.
The lower operating ROA in 2023 compared to previous years could reflect challenges in optimizing asset utilization to drive operating profitability. However, it is essential to conduct a deeper analysis to understand the underlying factors contributing to this change and evaluate the company's operational efficiency and asset management strategies.
Further investigation into Darling Ingredients Inc's operating expenses, revenue trends, asset turnover, and capital structure would provide valuable insights into the drivers behind the fluctuations in operating ROA. Additionally, comparing the company's operating ROA with industry benchmarks and peer performance could offer context for assessing its competitive position and identifying areas for improvement in asset efficiency and profitability.
Peer comparison
Dec 31, 2023