Now Inc (DNOW)
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 | 140,000 | 131,000 | 9,000 | -420,000 | -83,000 |
| Total assets | US$ in thousands | 1,529,000 | 1,320,000 | 1,104,000 | 1,008,000 | 1,591,000 |
| Operating ROA | 9.16% | 9.92% | 0.82% | -41.67% | -5.22% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $140,000K ÷ $1,529,000K
= 9.16%
NOW Inc's operating return on assets (ROA) measures the company's ability to generate operating income from its assets. Over the past five years, the operating ROA has fluctuated significantly:
1. In 2023, the operating ROA was 9.16%, indicating that the company generated 9.16 cents of operating income for every dollar of assets. This is a decent return, although slightly lower compared to the previous year.
2. In 2022, NOW Inc's operating ROA was 10.68%, showing an improvement from the prior year, signaling that the company was able to increase its operating income relative to its assets.
3. In 2021, the operating ROA was 1.45%, demonstrating a relatively low return on assets. This could indicate inefficiency in utilizing assets to generate operating income.
4. In 2020, the operating ROA was negative at -9.82%, suggesting that the company incurred operating losses relative to its assets. This could raise concerns about the company's operational performance during that year.
5. In 2019, the operating ROA stood at 2.83%, showing a moderate return on assets, indicating the company's ability to generate operating income from its assets.
Overall, the trend in NOW Inc's operating ROA indicates fluctuations in the company's operational efficiency and profitability over the past five years. It is essential for investors and stakeholders to closely monitor this ratio to assess the company's ability to effectively utilize its assets to generate operating income.
Peer comparison
Dec 31, 2023