Goodyear Tire & Rubber Co (GT)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -689,000 | 202,000 | 764,000 | -1,254,000 | -311,000 |
| Total assets | US$ in thousands | 21,582,000 | 22,431,000 | 21,402,000 | 16,506,000 | 17,185,000 |
| ROA | -3.19% | 0.90% | 3.57% | -7.60% | -1.81% |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $-689,000K ÷ $21,582,000K
= -3.19%
Goodyear Tire & Rubber Co.'s return on assets (ROA) has fluctuated over the past five years, as indicated in the provided data. In 2023, the company reported a negative ROA of -3.19%, representing a decline from the previous year's ROA of 0.90%. This negative ROA suggests that the company's assets were not effectively utilized to generate profits during the year.
Looking back at the trend, Goodyear showed improvement in its ROA from 2019 to 2021, with ROA increasing from -1.81% in 2019 to 3.57% in 2021. This improvement indicates that the company was able to enhance its efficiency in generating earnings from its assets during this period.
However, the significant decrease in ROA to -7.60% in 2020 is a concerning outlier, suggesting a substantial decline in profitability relative to the assets being employed. It is important for stakeholders to investigate the reasons behind this sharp decrease in ROA to understand the underlying factors impacting the company's performance during that specific year.
Overall, the negative ROA in 2023 raises questions about Goodyear Tire & Rubber Co.'s asset management and profitability. Further analysis of the company's financial health and operational efficiency is recommended to assess the sustainability and long-term prospects of the business.