Now Inc (DNOW)

Operating return on assets (Operating ROA)

Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 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
Operating income (ttm) US$ in thousands 121,000 126,000 140,000 138,000 142,000 143,000 150,000 143,000 131,000 103,000 69,000 -92,000 -123,000 -167,000 -198,000 -95,000 -420,000 -520,000 -485,000 -439,000
Total assets US$ in thousands 1,621,000 1,587,000 1,563,000 1,594,000 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
Operating ROA 7.46% 7.94% 8.96% 8.66% 9.29% 10.39% 10.56% 10.76% 9.92% 8.03% 5.74% -7.92% -11.14% -15.13% -18.50% -9.26% -41.67% -50.05% -45.37% -36.71%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $121,000K ÷ $1,621,000K
= 7.46%

Now Inc's operating return on assets (ROA) is calculated by dividing operating income by average total assets. A negative operating ROA indicates that the company is generating operating losses relative to its asset base.

From March 31, 2020, to June 30, 2022, Now Inc had consistently negative operating ROA figures, ranging from -36.71% to -18.50%. This suggests that during this period, the company struggled to generate operating profits compared to the size of its asset base.

However, starting from September 30, 2022, the operating ROA turned positive, indicating an improvement in operational efficiency and profitability. The trend continued positively through December 31, 2024, with operating ROA ranging from 7.46% to 10.76%.

The increasing positive trend in operating ROA from 2022 to 2024 indicates that Now Inc has been able to better utilize its assets to generate operating income and improve profitability. This could be the result of effective cost management, operational improvements, or increased revenue generation. Nonetheless, it would be important to further investigate the company's operations to understand the drivers behind this improvement in operating ROA.