IPG Photonics Corporation (IPGP)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Operating income (ttm)	US$ in thousands	-205,684	-190,347	118,705	176,158	232,484	257,601	252,317	251,929	269,646	300,043	351,607	372,184	367,883	348,321	287,748	242,705	198,659	133,661	166,393	210,274
Total assets	US$ in thousands	2,289,260	2,355,130	2,495,430	2,598,440	2,698,900	2,672,860	2,696,420	2,671,160	2,743,280	2,962,520	3,048,770	3,098,470	3,170,540	3,143,910	3,086,510	2,982,950	2,935,700	2,794,930	2,758,740	2,680,130
Operating ROA		-8.98%	-8.08%	4.76%	6.78%	8.61%	9.64%	9.36%	9.43%	9.83%	10.13%	11.53%	12.01%	11.60%	11.08%	9.32%	8.14%	6.77%	4.78%	6.03%	7.85%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $-205,684K ÷ $2,289,260K
= -8.98%

Operating ROA is a key profitability ratio that indicates how well a company is generating operating profits relative to its total assets. Over the period from March 31, 2020, to December 31, 2024, IPG Photonics Corporation's operating ROA fluctuated significantly.

Initially, the company's operating ROA stood at 7.85% in March 2020 and gradually decreased to a low of 4.78% by September 2020. Subsequently, there was an improvement in performance, with the ratio reaching 11.60% by December 31, 2021. This upward trend continued into 2022, peaking at 12.01% in March, indicating efficient asset utilization to generate operating income.

However, from mid-2022 onwards, there was a decline in IPG Photonics' operating ROA, falling to 4.76% by June 30, 2024. This sharp decrease continued, resulting in negative operating ROA, -8.98% by December 31, 2024, indicating that the company's operating profits were insufficient to cover the asset base.

This significant dip in the operating ROA during the latter part of the period signals potential issues with operational efficiency, asset management, or declining profitability. Further analysis of IPG Photonics Corporation's operational performance and asset utilization strategies is necessary to understand the reasons behind these fluctuations and to formulate appropriate actions to improve the operating ROA in the future.