Inter Parfums Inc (IPAR)

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	251,382	194,303	148,050	70,083	104,727
Total assets	US$ in thousands	1,369,330	1,308,540	1,145,360	890,145	828,832
Operating ROA		18.36%	14.85%	12.93%	7.87%	12.64%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $251,382K ÷ $1,369,330K
= 18.36%

Interpreting the trend in Inter Parfums, Inc.'s operating return on assets (operating ROA) reveals a mixed performance over the past five years. The operating ROA increased from 12.64% in 2019 to 18.36% in 2023, indicating a positive trajectory. This improvement suggests that the company's operating income generated from its assets has been increasing over the years.

The company's operating ROA was relatively stable between 2020 (7.87%) and 2022 (15.44%), showing a significant jump in 2022, followed by a further increase in 2023. This surge in operating ROA from 2020 to 2023 demonstrates that Inter Parfums has become more efficient in generating income from its assets, potentially due to improved operational performance or better asset utilization.

However, the dip in operating ROA in 2021 (13.13%) compared to the prior and subsequent years could indicate a temporary setback in the company's efficiency in utilizing its assets to generate operating income. It is essential for Inter Parfums to analyze the underlying reasons for this decline to ensure sustained improvement in its operating ROA.

Overall, the increasing trend in Inter Parfums' operating ROA signals positive performance, reflecting the company's ability to effectively utilize its assets to generate operating income. Moving forward, maintaining or further enhancing this trend will be key to driving profitability and creating long-term value for the company and its stakeholders.