Dow Inc (DOW)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 589,000 | 4,582,000 | 6,311,000 | 1,225,000 | -1,359,000 |
| Total assets | US$ in thousands | 57,967,000 | 60,603,000 | 62,990,000 | 61,470,000 | 60,524,000 |
| ROA | 1.02% | 7.56% | 10.02% | 1.99% | -2.25% |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $589,000K ÷ $57,967,000K
= 1.02%
To analyze Dow Inc's return on assets (ROA) using the provided data, we calculate the ROA by dividing net income by average total assets. The trend in Dow Inc's ROA from 2019 to 2023 indicates fluctuations in the company's ability to generate profit from its assets.
In 2019, the ROA stood at -2.25%, indicating that the company experienced a negative return on its assets, potentially due to lower profits relative to the average total assets. However, in subsequent years, there was a notable improvement in ROA. By 2021, the ROA had significantly increased to 10.02%, suggesting that Dow Inc had efficiently utilized its assets to generate profit.
The ROA dropped to 1.99% in 2020 before further declining to 7.56% in 2022 and then to 1.02% in 2023, indicating a decrease in the company's ability to generate earnings relative to its assets in those years.
The fluctuation in Dow Inc's ROA suggests varying levels of profitability and efficiency in asset utilization over the years. Further analysis is required to understand the factors driving these fluctuations and their impact on the company's overall financial performance.
Peer comparison
Dec 31, 2023