Emerson Electric Company (EMR)

Return on assets (ROA)

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Net income	US$ in thousands	13,219,000	3,231,000	2,303,000	1,965,000	2,306,000
Total assets	US$ in thousands	42,746,000	35,672,000	24,715,000	22,882,000	20,497,000
ROA		30.92%	9.06%	9.32%	8.59%	11.25%

September 30, 2023 calculation

ROA = Net income ÷ Total assets
= $13,219,000K ÷ $42,746,000K
= 30.92%

EMR (Emerson Electric Co.) has seen fluctuations in its Return on Assets (ROA) over the past five years. ROA is a key financial ratio that measures a company's ability to generate profits from its assets.

In 2019, EMR's ROA was 11.25%, which indicates that the company generated $11.25 in profit for every $100 of assets. This was a healthy ROA, reflecting efficient asset utilization. However, there was a notable decline in 2020, with the ROA decreasing to 8.59%. This decline may suggest that EMR faced challenges in effectively utilizing its assets to generate profits that year.

The subsequent year, 2021, saw a slight increase in ROA to 9.32%, indicating a partial recovery in asset efficiency. However, it's important to note that the ROA still remained below the 2019 level. In 2022, there was a significant improvement in ROA, rising to 9.06%, signaling a further recovery in asset efficiency.

The most recent data for Sep 30, 2023, shows a substantial increase in ROA to 30.91%, representing a remarkable improvement in the company's ability to generate earnings from its assets. This significant advancement in ROA may indicate that EMR has made strategic adjustments in its asset management and operational efficiency.

In summary, EMR's ROA has demonstrated fluctuations over the past five years, with a notable decline in 2020 followed by a gradual recovery in subsequent years, culminating in a substantial improvement in 2023. This suggests that the company has worked to enhance its asset utilization and overall profitability, thereby reflecting positively on its financial performance.