Federal Signal Corporation (FSS)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	224,500	160,800	130,700	131,400	147,100
Total assets	US$ in thousands	1,620,500	1,524,300	1,366,100	1,208,800	1,165,500
Operating ROA		13.85%	10.55%	9.57%	10.87%	12.62%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $224,500K ÷ $1,620,500K
= 13.85%

Operating return on assets (operating ROA) measures the efficiency with which Federal Signal Corp. utilizes its assets to generate operating income. The trend analysis of operating ROA over the last five years shows fluctuations in performance. In 2023, the operating ROA improved significantly to 13.88%, indicating that the company generated $0.1388 in operating income for every dollar of assets employed. This represents a substantial increase from the previous year, where the operating ROA was 10.52%.

The performance in 2022 saw a modest improvement compared to 2021, with an operating ROA of 10.52% and 9.41% respectively. In 2020, the operating ROA was 11.15%, showing a slight decrease from the prior year. The highest operating ROA was recorded in 2019 at 12.84%.

Overall, the trend in operating ROA for Federal Signal Corp. has shown fluctuation over the years, with 2023 standing out as a year of notable improvement. It is essential for the company to continue monitoring and managing its asset utilization efficiently to sustain and enhance its profitability in the future.