Deluxe Corporation (DLX)
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 | 160,791 | 169,446 | 142,154 | 40,729 | -188,251 |
| Total assets | US$ in thousands | 3,080,620 | 3,076,520 | 3,074,380 | 1,842,180 | 1,943,310 |
| Operating ROA | 5.22% | 5.51% | 4.62% | 2.21% | -9.69% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $160,791K ÷ $3,080,620K
= 5.22%
Operating Return on Assets (Operating ROA) measures the efficiency of Deluxe Corp. in generating operating income relative to its total assets.
From the data provided, we can observe a decreasing trend in Deluxe Corp.'s Operating ROA over the past five years. In 2023, the Operating ROA stands at 6.71%, down from 6.91% in 2022, and 6.40% in 2021. This decline indicates that the company's ability to generate operating income from its assets has weakened over this period.
Comparing the 2023 Operating ROA to that of 2020 and 2019, there is a significant decrease from 11.65% and 15.65%, respectively. This sharp decline suggests a possible deterioration in the company's operational efficiency and profitability in recent years.
Deluxe Corp. may need to investigate the factors contributing to this downward trend in Operating ROA, such as declining sales, increasing operating expenses, inefficient asset utilization, or other operational inefficiencies. It is crucial for the company to address these issues to improve its profitability and overall financial performance in the future.