Graham Holdings Co (GHC)

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	215,504	69,393	444,716	273,422	414,961
Total assets	US$ in thousands	7,677,200	7,187,730	6,582,220	7,425,520	6,444,120
Operating ROA		2.81%	0.97%	6.76%	3.68%	6.44%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $215,504K ÷ $7,677,200K
= 2.81%

Operating Return on Assets (Operating ROA) is a key financial ratio that measures a company's ability to generate operating income relative to its total assets.

Analyzing the data provided for Graham Holdings Co over the years, we observe fluctuating trends in the company's operating ROA.

- In December 2020, the operating ROA stood at 6.44%, showcasing a strong performance where the company generated $6.44 in operating income for every $100 of total assets.
- However, in December 2021, there was a slight decline in the operating ROA to 3.68%, indicating a decrease in the efficiency of asset utilization to generate operating income.
- The following year, December 2022, saw a notable improvement in the operating ROA to 6.76%, signaling a positive turnaround in utilizing assets more effectively to generate operating profits.
- Subsequently, in December 2023, the operating ROA dropped significantly to 0.97%, reflecting a sharp decline in operating income generated from the company's assets.
- Lastly, by December 2024, the operating ROA improved to 2.81%, albeit still below the levels seen in 2020 and 2022.

Overall, the fluctuating trend in operating ROA for Graham Holdings Co suggests varying levels of operational efficiency and profitability in utilizing its assets to generate operating income over the years. Further analysis and examination of the underlying factors contributing to these fluctuations would be necessary to understand the drivers behind these changes and to formulate appropriate strategies for improvement.