Hormel Foods Corporation (HRL)
Operating return on assets (Operating ROA)
| Oct 31, 2024 | Oct 27, 2024 | Oct 31, 2023 | Oct 29, 2023 | Oct 31, 2022 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,067,930 | 1,067,930 | 1,072,050 | 1,072,050 | 1,312,610 |
| Total assets | US$ in thousands | 13,434,700 | 13,434,700 | 13,448,800 | 13,448,800 | 13,306,900 |
| Operating ROA | 7.95% | 7.95% | 7.97% | 7.97% | 9.86% |
October 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $1,067,930K ÷ $13,434,700K
= 7.95%
Based on the data provided, Hormel Foods Corporation's operating return on assets (ROA) has shown a gradual decline over the years. From October 31, 2022, where the operating ROA was at 9.86%, it decreased to 7.97% in both October 29, 2023, and October 31, 2023. The trend continued as of October 27, 2024, and October 31, 2024, with the operating ROA remaining constant at 7.95%.
This downward trend in operating ROA may indicate challenges in generating operating profits from the assets employed by the company. It is essential for Hormel Foods Corporation to closely examine its operational efficiency, asset utilization, and profitability to improve its operating ROA performance in the future. This analysis suggests the need for the company to focus on enhancing internal operations and optimizing asset management strategies to boost its overall profitability.