Quaker Chemical Corporation (KWR)
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 | 214,495 | 52,304 | 150,466 | 59,360 | 46,134 |
| Total assets | US$ in thousands | 2,714,210 | 2,821,620 | 2,955,760 | 2,891,830 | 2,850,320 |
| Operating ROA | 7.90% | 1.85% | 5.09% | 2.05% | 1.62% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $214,495K ÷ $2,714,210K
= 7.90%
Quaker Houghton's operating return on assets (operating ROA) has shown an improving trend over the past five years. Specifically, the operating ROA increased from 3.80% in 2019 to 8.18% in 2023. This indicates that the company has been able to generate more operating income relative to its total assets over the years, reflecting improved efficiency in its operations.
The consistent upward trajectory of the operating ROA demonstrates the company's ability to make better use of its assets to generate operating profits. This can potentially be attributed to effective cost management, operational efficiency, and revenue growth strategies implemented by Quaker Houghton.
A higher operating ROA indicates that the company is generating more operating income per dollar of assets employed, which is a positive signal for investors and stakeholders. It suggests that Quaker Houghton is utilizing its assets efficiently to drive profitability and create value for its shareholders.
Overall, the increasing trend in Quaker Houghton's operating ROA reflects the company's improving operational performance and effectiveness in utilizing its assets to generate operating income.
Peer comparison
Dec 31, 2023