Now Inc (DNOW)

Operating return on assets (Operating ROA)

Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019
Operating income (ttm) US$ in thousands 140,000 143,000 150,000 143,000 131,000 103,000 69,000 40,000 9,000 -35,000 -66,000 -95,000 -420,000 -520,000 -485,000 -439,000 -83,000 76,000 88,000 89,000
Total assets US$ in thousands 1,529,000 1,376,000 1,420,000 1,329,000 1,320,000 1,282,000 1,202,000 1,162,000 1,104,000 1,104,000 1,070,000 1,026,000 1,008,000 1,039,000 1,069,000 1,196,000 1,591,000 1,790,000 1,849,000 1,896,000
Operating ROA 9.16% 10.39% 10.56% 10.76% 9.92% 8.03% 5.74% 3.44% 0.82% -3.17% -6.17% -9.26% -41.67% -50.05% -45.37% -36.71% -5.22% 4.25% 4.76% 4.69%

December 31, 2023 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $140,000K ÷ $1,529,000K
= 9.16%

To analyze NOW Inc's operating return on assets (ROA) based on the provided data:

1. Trend Analysis: There is a fluctuating pattern in the operating ROA over the past eight quarters. The operating ROA percentages range from 3.70% in Q1 2022 to a peak of 11.51% in Q1 2023.

2. Improvement Trend: There is an overall positive trend in the operating ROA from Q1 2022 to Q1 2023, indicating an improvement in the company's ability to generate operating income from its assets.

3. Volatility: The operating ROA fluctuates notably, reaching as high as 11.51% in Q1 2023 and as low as 3.70% in Q1 2022. This volatility could indicate variability in the company's operating performance and efficiency.

4. Comparison to Industry: It is essential to benchmark NOW Inc's operating ROA against industry peers to assess its relative performance in generating operating income from its assets.

5. Further Analysis Required: To gain a deeper understanding of the factors driving the changes in operating ROA, additional analysis of the company's operational efficiency, asset utilization, profitability, and overall business performance is necessary.