Globus Medical (GMED)
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 | 133,142 | 227,951 | 171,953 | 111,433 | 171,989 |
| Total assets | US$ in thousands | 5,086,080 | 2,076,130 | 1,957,260 | 1,679,480 | 1,532,080 |
| Operating ROA | 2.62% | 10.98% | 8.79% | 6.63% | 11.23% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $133,142K ÷ $5,086,080K
= 2.62%
Operating return on assets (ROA) measures a company's ability to generate operating income relative to its total assets. A higher operating ROA indicates better efficiency in utilizing assets to generate profits. Reflecting on Globus Medical Inc's operating ROA data from 2019 to 2023, it is evident that there has been fluctuation in the company's performance.
In 2019, Globus Medical Inc had a relatively high operating ROA of 11.39%, indicating strong efficiency in generating operating income from its assets. However, in 2020, the operating ROA decreased to 6.87%, suggesting a decline in operational efficiency. The company's performance improved in 2021 with an operating ROA of 9.96%, indicating a partial recovery.
In 2022, Globus Medical Inc experienced a significant increase in operating ROA to 11.38%, surpassing the levels seen in 2021 and nearing the high achieved in 2019. However, in 2023, the operating ROA dropped to 3.97%, signaling a notable decrease in operational efficiency compared to the previous year and a return to a lower level similar to 2020.
Overall, Globus Medical Inc's operating ROA has fluctuated over the years, indicating varying levels of operational efficiency in utilizing its assets to generate operating income. It may be beneficial for the company to focus on maintaining or improving its efficiency in the utilization of assets to sustain profitability in the long term.
Peer comparison
Dec 31, 2023