Laboratory Corporation of America Holdings (LH)
Operating return on assets (Operating ROA)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,086,700 | 725,600 | 1,436,500 | 3,259,500 | 2,445,400 |
| Total assets | US$ in thousands | 18,379,000 | 16,725,100 | 20,155,100 | 20,385,400 | 20,071,700 |
| Operating ROA | 5.91% | 4.34% | 7.13% | 15.99% | 12.18% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $1,086,700K ÷ $18,379,000K
= 5.91%
The operating return on assets (ROA) for Laboratory Corporation of America Holdings has varied over the past five years. In 2020, the operating ROA was 12.18%, indicating that the company generated $12.18 in operating income for every $100 of assets it had. By the end of 2021, the operating ROA had improved to 15.99%, showing increased efficiency in asset utilization and profitability.
However, in 2022, there was a significant decrease in the operating ROA to 7.13%, which suggests a potential decline in operational performance or asset productivity. This trend continued in 2023 with a further drop to 4.34%, indicating that the company may be facing challenges in generating operating income relative to its asset base.
Fortunately, by the end of 2024, the operating ROA started to recover slightly to 5.91%. While this shows a slight improvement compared to the previous year, it is below the levels seen in 2021 and 2020. Management should closely monitor and address the factors contributing to the fluctuations in operating ROA to sustain and enhance the company's operational efficiency and profitability in the future.
Peer comparison
Dec 31, 2024