Laboratory Corporation of America Holdings (LH)
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 | 725,600 | 1,436,500 | 3,259,500 | 2,445,400 | 1,330,200 |
| Total assets | US$ in thousands | 16,725,100 | 20,155,100 | 20,385,400 | 20,071,700 | 18,046,400 |
| Operating ROA | 4.34% | 7.13% | 15.99% | 12.18% | 7.37% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $725,600K ÷ $16,725,100K
= 4.34%
Laboratory Corp. Of America Holdings' operating return on assets (operating ROA) has shown a fluctuating trend over the past five years. In 2023, the operating ROA stands at 6.72%, which is a decrease from the previous year's 10.56%. The company's operating ROA was significantly higher in 2021 at 16.20% compared to 2022 and 2023, indicating a peak performance. In 2020, the operating ROA was 14.69%, which was a strong performance as well. The lowest operating ROA over the period was in 2019 at 7.67%.
The decreasing trend in the operating ROA from 2021 to 2023 suggests that the company may be facing challenges in generating operating income relative to its total assets. It is essential for the company to analyze the factors contributing to this decline in operating ROA and take necessary steps to improve efficiency and profitability in utilizing its assets to generate operating income. Further analysis of the company's financial statements and operational performance is recommended to identify specific areas for improvement in order to enhance the operating ROA in the future.
Peer comparison
Dec 31, 2023