Flex Ltd (FLEX)

Operating return on assets (Operating ROA)

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Operating income	US$ in thousands	853,000	1,017,000	972,000	795,000	415,000
Total assets	US$ in thousands	18,257,000	21,407,000	19,325,000	15,836,000	13,690,000
Operating ROA		4.67%	4.75%	5.03%	5.02%	3.03%

March 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $853,000K ÷ $18,257,000K
= 4.67%

Flex Ltd's operating return on assets (operating ROA) has shown a fluctuating trend over the past five years. The company's operating ROA decreased slightly from 5.03% in 2022 to 4.67% in 2024. This decline could be a result of a decrease in operating income relative to total assets employed in the business.

However, it is important to note that the operating ROA remained relatively stable around the 5% mark between 2021 and 2023, indicating a consistent ability to generate operating income from its assets during those years. This suggests that Flex Ltd has been effectively utilizing its assets to generate operating profits.

The increase in operating ROA from 3.03% in 2020 to over 4.6% in 2024 demonstrates an improvement in the company's operational efficiency over the years. This could be attributed to better cost management, increased operational productivity, or strategic investment decisions that have positively impacted the company's profitability relative to its asset base.

Overall, the fluctuating yet fairly stable trend in Flex Ltd's operating ROA over the years indicates a mix of operational challenges and successes. Monitoring this ratio over time can provide valuable insights into the company's operational performance and efficiency in generating profits from its assets.