Greif Bros Corporation (GEF)
Operating return on assets (Operating ROA)
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 605,500 | 621,200 | 585,200 | 304,900 | 399,100 |
| Total assets | US$ in thousands | 5,960,800 | 5,469,900 | 5,815,800 | 5,510,900 | 5,426,700 |
| Operating ROA | 10.16% | 11.36% | 10.06% | 5.53% | 7.35% |
October 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $605,500K ÷ $5,960,800K
= 10.16%
The operating return on assets (operating ROA) measures the company's ability to generate operating profits from its assets. Greif Inc's operating ROA has fluctuated over the past five years, ranging from 7.23% in 2020 to 12.88% in 2022. The decline in operating ROA from 2022 to 2023, dropping to 10.02%, may be a cause for concern as it could indicate a decrease in operational efficiency or profitability relative to its asset base.
However, the operating ROA in 2023 remains relatively strong compared to the 2019 and 2021 figures, indicating the company's ability to generate operating income from its assets has improved since then. It would be important for stakeholders to further investigate the reasons behind the fluctuations in operating ROA and assess the company's operational performance and asset utilization in order to determine the impact on overall financial performance and to make informed decisions.