WW Grainger Inc (GWW)
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 | 2,565,000 | 2,215,000 | 1,547,000 | 1,019,000 | 1,262,000 |
| Total assets | US$ in thousands | 8,147,000 | 7,588,000 | 6,592,000 | 6,295,000 | 6,005,000 |
| Operating ROA | 31.48% | 29.19% | 23.47% | 16.19% | 21.02% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $2,565,000K ÷ $8,147,000K
= 31.48%
The operating return on assets (operating ROA) for W.W. Grainger Inc. has been consistently increasing over the past five years from 2019 to 2023. The ratio increased from 21.02% in 2019 to 31.48% in 2023, indicating an improvement in the company's ability to generate operating income from its assets.
This upward trend suggests that W.W. Grainger has been effectively utilizing its assets to generate operating profits over the years. The company's management may have implemented efficient operating strategies, cost-saving measures, or revenue-enhancing initiatives to boost its operating ROA.
The significant increase in the operating ROA from 2019 to 2023 reflects positively on W.W. Grainger's operational efficiency and profitability, indicating that the company has been able to increase its operating income relative to its asset base. Investors and stakeholders may view this trend as a positive indicator of the company's financial health and management effectiveness.