Dollar Tree Inc (DLTR)

Operating return on assets (Operating ROA)

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Operating income	US$ in thousands	-881,800	2,236,300	1,811,400	1,887,900	1,262,200
Total assets	US$ in thousands	22,023,500	23,022,100	21,721,800	20,696,000	19,574,600
Operating ROA		-4.00%	9.71%	8.34%	9.12%	6.45%

February 3, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $-881,800K ÷ $22,023,500K
= -4.00%

Operating Return on Assets (Operating ROA) is a key financial ratio that indicates the company's ability to generate operating profits from its assets. A higher operating ROA suggests more efficient utilization of assets to generate operating income.

Looking at the trend of Dollar Tree Inc's Operating ROA over the past five years, we see fluctuations in performance. In fiscal year 2024, the Operating ROA decreased significantly to -4.00%, indicating a negative return on assets from operations. This could be a cause for concern as it suggests that the company's operating income is not sufficient to cover the assets employed in its operations.

In the previous years, Dollar Tree Inc's Operating ROA showed a more positive trend, with values ranging from 6.45% in fiscal year 2020 to 9.71% in fiscal year 2023. These figures indicate that the company was more effectively generating operating income relative to its assets during these periods.

The dip in Operating ROA in fiscal year 2024 raises questions about the company's operational efficiency and profitability. It may be necessary for Dollar Tree Inc to evaluate its cost structure, revenue streams, and asset management strategies to improve its Operating ROA and ensure sustainable performance in the future.