Freshpet Inc (FRPT)

Operating return on assets (Operating ROA)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Operating income US$ in thousands 37,999 -30,446 -51,983 -24,650 -1,911
Total assets US$ in thousands 1,574,880 1,464,420 1,125,380 784,410 434,388
Operating ROA 2.41% -2.08% -4.62% -3.14% -0.44%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $37,999K ÷ $1,574,880K
= 2.41%

The operating return on assets (ROA) for Freshpet Inc. exhibits a notable trend over the period from December 31, 2020, to December 31, 2024. In 2020, the company reported an operating ROA of -0.44%, indicating a marginal negative return relative to its assets, which suggests minimal operational efficiency or profitability challenges at that time. The decline in 2021 to -3.14% demonstrates a worsening operational performance, accentuating difficulties in generating returns from its asset base.

This deterioration continued into 2022, with the operating ROA declining further to -4.62%. The persistent negative trajectory underscores ongoing operational inefficiencies or increased costs relative to revenue, reflecting a period of significant challenge in profitability. However, a positive shift is observed in 2023, where the operating ROA improves to -2.08%. Although still negative, this indicates a reduction in operating losses relative to assets, signaling a potential beginning of operational stabilization or improvement.

By 2024, the operating ROA has transitioned into positive territory at 2.41%. This marks a substantial turnaround, reflecting that Freshpet Inc. was able to generate a healthy operating return relative to its assets during this period. The shift from negative to positive ROA suggests enhanced operational effectiveness, better cost management, or increased revenue generation that more efficiently utilizes the company's asset base.

Overall, the trend encapsulates a period of significant operational distress leading to minimal negative returns, followed by gradual improvement culminating in positive operating efficiency in 2024. This positive development may indicate that strategic adjustments or market conditions have begun to favorably impact the company's operational performance.