Lear Corporation (LEA)
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 | 933,200 | 654,300 | 675,400 | 454,100 | 1,070,200 |
| Total assets | US$ in thousands | 14,695,500 | 13,763,000 | 13,352,400 | 13,198,600 | 12,680,700 |
| Operating ROA | 6.35% | 4.75% | 5.06% | 3.44% | 8.44% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $933,200K ÷ $14,695,500K
= 6.35%
The operating return on assets (ROA) for Lear Corp. has shown some fluctuation over the past five years. In 2023, the operating ROA improved to 6.35% from 4.75% in 2022, indicating an enhanced ability to generate operating profit from its assets. This increase could be a positive sign of improved operational efficiency or profitability.
Comparing 2023 to 2021 and 2020, where the operating ROA was 5.06% and 3.44% respectively, the company has shown a general trend of improvement in utilizing its assets to generate operating income. This suggests that management may have implemented strategies to improve operational performance and asset utilization during these periods.
However, when compared to 2019, where the operating ROA was significantly higher at 8.44%, there is a decline in the efficiency of using assets to generate operating profit in 2023. It would be important to investigate the reasons behind this decrease and assess whether it is due to changes in the company's operations or external factors.
Overall, while the operating ROA for Lear Corp. has shown variability over the years, the recent increase in 2023 indicates a potential improvement in the company's operational efficiency and profitability. Tracking this ratio over time can provide valuable insights into the company's performance and management effectiveness.
Peer comparison
Dec 31, 2023