Laboratory Corporation of America Holdings (LH)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 418,000 | 1,279,100 | 2,377,300 | 1,556,100 | 823,800 |
| Total assets | US$ in thousands | 16,725,100 | 20,155,100 | 20,385,400 | 20,071,700 | 18,046,400 |
| ROA | 2.50% | 6.35% | 11.66% | 7.75% | 4.56% |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $418,000K ÷ $16,725,100K
= 2.50%
Laboratory Corp. Of America Holdings' return on assets (ROA) has fluctuated over the past five years, as depicted in the table. The ROA decreased to 2.50% at the end of 2023, following a downward trend from its peak of 11.66% at the end of 2021. Despite the decrease, the current ROA of 2.50% is still higher than the ROA at the end of 2019 and 2020, indicating some level of improvement.
The declining trend in ROA suggests that the company may be facing challenges in generating profits relative to its asset base. This could be due to various factors such as increasing costs, lower revenues, or inefficient asset utilization.
Investors and stakeholders may monitor the company's future performance closely to assess whether the declining ROA is a temporary fluctuation or a concerning long-term trend that requires strategic interventions to improve profitability and asset efficiency.
Peer comparison
Dec 31, 2023