Lear Corporation (LEA)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 572,500 | 327,700 | 373,900 | 158,500 | 753,600 |
| Total assets | US$ in thousands | 14,695,500 | 13,763,000 | 13,352,400 | 13,198,600 | 12,680,700 |
| ROA | 3.90% | 2.38% | 2.80% | 1.20% | 5.94% |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $572,500K ÷ $14,695,500K
= 3.90%
The Return on Assets (ROA) ratio measures a company's ability to generate profit from its assets. It indicates how efficiently a company is utilizing its assets to generate earnings.
Analyzing Lear Corp.'s ROA over the past five years, we observe fluctuations in the ratio. In 2023, the ROA stood at 3.90%, showing an improvement compared to the previous year's 2.38%. This indicates an enhancement in the company's ability to generate profit relative to its total assets in the most recent year.
In 2021, the ROA was 2.80%, reflecting a slight decline from the previous year's 3.90%. However, it remained higher than the 2020 figure of 1.20%, suggesting a recovery in asset efficiency.
The significant ROA of 6.23% in 2019 stands out as a peak performance compared to the subsequent years. This indicates that Lear Corp. was able to generate substantial profit relative to its assets in that particular year.
Overall, despite the fluctuations observed in Lear Corp.'s ROA over the past five years, there seems to be a general trend of improvement in asset utilization efficiency, with the company showing increased profitability relative to its total assets in the most recent year compared to prior years.
Peer comparison
Dec 31, 2023