Hormel Foods Corporation (HRL)
Operating return on assets (Operating ROA)
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,067,930 | 1,072,050 | 1,312,610 | 1,122,600 | 1,100,220 |
| Total assets | US$ in thousands | 13,434,700 | 13,448,800 | 13,306,900 | 12,696,300 | 9,908,280 |
| Operating ROA | 7.95% | 7.97% | 9.86% | 8.84% | 11.10% |
October 27, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $1,067,930K ÷ $13,434,700K
= 7.95%
The operating return on assets (ROA) of Hormel Foods Corporation has shown a decreasing trend over the past five years. The company's operating ROA was 11.10% in October 2020, but has gradually declined to 7.95% in October 2024. This indicates that the company's operating profit generated from its assets has been decreasing over time.
Although the operating ROA fluctuated slightly between 2021 and 2023, the overall trend has been downward. This may suggest that Hormel Foods Corporation is facing challenges in efficiently utilizing its assets to generate operating income.
The decreasing trend in operating ROA could be a cause for concern, as it indicates a potential decline in the company's operational efficiency and profitability. It is important for the company to closely monitor and address the factors contributing to this trend to ensure sustainable performance and value creation for its shareholders in the future.