Kratos Defense & Security Solutions (KTOS)
Return on assets (ROA)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 16,300 | -8,900 | -34,100 | 500 | 79,600 |
| Total assets | US$ in thousands | 1,950,900 | 1,632,500 | 1,551,500 | 1,589,500 | 1,562,800 |
| ROA | 0.84% | -0.55% | -2.20% | 0.03% | 5.09% |
December 31, 2024 calculation
ROA = Net income ÷ Total assets
= $16,300K ÷ $1,950,900K
= 0.84%
The analysis of Kratos Defense & Security Solutions’ return on assets (ROA) over the period from December 31, 2020, to December 31, 2024, reveals significant fluctuations in profitability and asset efficiency.
At the close of 2020, the company's ROA was measured at 5.09%, indicating a relatively strong ability to generate net income from its total assets. This suggests efficient utilization of assets to produce earnings during that period.
However, there was a dramatic decline in 2021, with ROA plummeting to approximately 0.03%. This near-zero ratio reflects a substantial weakening in asset profitability, possibly due to increased expenses, lower revenues, or strategic investments that did not immediately translate into earnings. The sharp decline represents a significant compression of the company’s earnings relative to its asset base.
The downward trend persisted into 2022, with ROA turning negative at -2.20%. This negative value indicates that the company was experiencing net losses relative to its total assets, meaning that assets were not only underutilized but also operationally unprofitable during that year.
In 2023, the ROA improved slightly to -0.55%, signifying a moderate reduction in losses and an improvement in asset productivity compared to the previous year. Despite remaining negative, this indicates some level of operational stabilization or incremental profit generation that reduced the extent of losses.
By 2024, the ROA turned positive again, reaching 0.84%. This positive ratio suggests the company successfully improved its profitability, generating net income from its assets, albeit at a modest level. The upward movement indicates a turnaround in operational performance, with the potential for further improvement if positive trends continue.
Overall, the ROA trend demonstrates a transition from strong profitability in 2020 to substantial losses in 2022, followed by gradual recovery in subsequent years. The returns reflect the company's evolving operational circumstances, strategic decisions, and market conditions that have influenced its ability to effectively leverage its assets for profit generation.
Peer comparison
Dec 31, 2024