MGP Ingredients Inc (MGPI)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 107,475 | 109,462 | 91,307 | 40,345 | 38,793 |
| Total assets | US$ in thousands | 1,392,350 | 1,158,210 | 1,041,470 | 366,575 | 322,597 |
| ROA | 7.72% | 9.45% | 8.77% | 11.01% | 12.03% |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $107,475K ÷ $1,392,350K
= 7.72%
The return on assets (ROA) of MGP Ingredients, Inc. has shown a decreasing trend over the past five years, declining from 11.95% in 2019 to 7.64% in 2023. This indicates that the company's ability to generate profits from its assets has weakened over time. The ROA was highest in 2020 at 10.93% and has since been on a downward trajectory. A declining ROA could suggest inefficiencies in asset utilization or decreasing profitability relative to the size of the asset base. Further analysis of the company's operations and asset management strategies may be necessary to understand the drivers behind this trend and identify areas for improvement.