Graham Holdings Co (GHC)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Operating income (ttm)	US$ in thousands	241,866	212,449	73,689	79,471	111,096	210,288	378,173	359,446	387,473	267,742	140,362	138,625	77,375	101,029	157,880	126,166	100,407	84,518	60,542	112,628
Total assets	US$ in thousands	7,677,200	7,420,820	7,234,050	7,255,130	7,187,730	6,689,190	6,603,960	6,542,200	6,582,220	7,277,130	7,161,300	7,360,140	7,425,520	6,679,470	6,576,540	6,518,420	6,444,120	5,811,510	5,672,320	5,645,820
Operating ROA		3.15%	2.86%	1.02%	1.10%	1.55%	3.14%	5.73%	5.49%	5.89%	3.68%	1.96%	1.88%	1.04%	1.51%	2.40%	1.94%	1.56%	1.45%	1.07%	1.99%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $241,866K ÷ $7,677,200K
= 3.15%

Operating ROA is a key financial ratio that provides insight into how efficiently a company is generating profits from its assets. For Graham Holdings Co, the trend in operating ROA over the past few years shows some variability. The operating ROA fluctuated between 1% and 3% from March 2020 to June 2022, indicating moderate performance in generating profits from its operating assets during this period.

There was a significant improvement in operating ROA starting from September 2022, with a notable increase to 3.68% and further growth to 5.89% by December 2022. This suggests a substantial enhancement in profitability relative to the operating assets deployed by the company during this timeframe.

The positive trend continued into 2023, with operating ROA remaining above 3% in each quarter, peaking at 5.73% in June 2023. This sustained high level of operating ROA indicates the company's ability to efficiently utilize its assets to generate profits.

However, the operating ROA started to decline from September 2023 onwards, dropping to 1.55% by December 2023. The declining trend continued into 2024, with operating ROA fluctuating between 1% and 3% for the rest of the quarters.

In conclusion, Graham Holdings Co experienced a significant improvement in operating ROA in late 2022 and early 2023, demonstrating strong profitability from its operating assets. However, the ratio declined in late 2023 and 2024, showing some challenges in maintaining the high levels of profitability achieved earlier. Further analysis into the company's operating performance and asset management strategies may be required to understand the factors contributing to these fluctuations in operating ROA.