FMC Corporation (FMC)

Return on assets (ROA)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Net income US$ in thousands 341,100 1,318,800 736,500 739,600 552,400
Total assets US$ in thousands 11,653,300 11,926,200 11,171,300 10,581,300 10,186,400
ROA 2.93% 11.06% 6.59% 6.99% 5.42%

December 31, 2024 calculation

ROA = Net income ÷ Total assets
= $341,100K ÷ $11,653,300K
= 2.93%

The Return on Assets (ROA) measures a company's efficiency in generating profits from its total assets. Analyzing FMC Corporation's ROA over the past five years reveals a mix of performance trends.

As of December 31, 2020, FMC Corporation's ROA stood at 5.42%, indicating that the company generated $0.0542 in profit for every dollar of assets. Over the next three years, there was a generally positive trend in ROA, with figures of 6.99% in 2021, 6.59% in 2022, and a significant increase to 11.06% by December 31, 2023. This upward trajectory suggests improved efficiency in asset utilization and profitability during this period.

However, the ROA dropped sharply to 2.93% by December 31, 2024, signaling a decline in profitability relative to its asset base. This decrease could be due to various factors such as increased asset base without a proportionate rise in earnings or operational inefficiencies.

In conclusion, while FMC Corporation showed an overall improvement in ROA from 2020 to 2023, the significant drop in 2024 raises questions about the company's asset management strategies and profitability. Further analysis and context are necessary to understand the underlying reasons for these fluctuations and assess the company's financial health accurately.