Group 1 Automotive Inc (GPI)

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	968,600	1,091,400	884,400	495,700	358,300
Total assets	US$ in thousands	7,774,100	6,717,500	5,749,400	5,089,400	5,570,200
Operating ROA		12.46%	16.25%	15.38%	9.74%	6.43%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $968,600K ÷ $7,774,100K
= 12.46%

Operating Return on Assets (Operating ROA) is a financial ratio that measures a company's ability to generate operating profits from its assets. Group 1 Automotive, Inc. has demonstrated a positive trend in its Operating ROA over the past five years.

In 2019, the company's Operating ROA was at 6.93%, indicating that for every dollar of assets, the company generated approximately 6.93 cents in operating profits. This number increased significantly to 10.29% in 2020, showing an improvement in the company's operational efficiency and profitability.

The trend continued with a further increase to 15.41% in 2021, demonstrating a strong performance in utilizing its assets to create operating income. In 2022, there was a slight decline to 16.28%, but the figure remained relatively high, indicating continued efficiency in generating profits from assets.

However, in 2023, there was a decrease in Group 1 Automotive's Operating ROA to 12.88%, which may suggest that the company's profitability in relation to its assets has slightly decreased compared to the previous year.

Overall, Group 1 Automotive, Inc. has shown a positive trend in its Operating ROA over the past five years, reflecting efficient operations and effective utilization of assets to generate operating profits. However, the slight decrease in 2023 may warrant further investigation to understand the reasons behind the change and potential strategies for improvement.