Magnolia Oil & Gas Corp (MGY)

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	534,485	1,073,790	602,594	-1,925,670	127,502
Total assets	US$ in thousands	2,756,220	2,572,580	1,746,740	1,453,420	3,466,410
Operating ROA		19.39%	41.74%	34.50%	-132.49%	3.68%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $534,485K ÷ $2,756,220K
= 19.39%

The operating return on assets (operating ROA) for Magnolia Oil & Gas Corp has varied significantly over the past five years. In 2023, the operating ROA was 19.39%, showing a decrease from the previous year's figure of 41.74%. Despite this decline, the operating ROA remained positive, indicating that the company generated a return on its assets from its core operations.

In 2022, the operating ROA was at its highest point over the period at 41.74%, reflecting a strong performance in utilizing its assets to generate operating income. The company's ability to efficiently deploy its assets contributed to this impressive figure.

In contrast, 2020 saw a significant decrease in the operating ROA to -132.49%, indicating that the company incurred operating losses that exceeded the value of its assets. This negative figure raises concerns about the company's operational efficiency and profitability during that period.

The operating ROA in 2021 rebounded to a positive 34.50%, signaling an improvement in the company's ability to generate operating income relative to its assets. This recovery from the previous year's loss underscores the company's efforts to enhance operational performance.

In 2019, the operating ROA stood at 3.68%, reflecting a moderate return on assets from operations. While not as high as the figures in the subsequent years, it still indicated a positive trend in utilizing assets for generating operating income.

Overall, the analysis of Magnolia Oil & Gas Corp's operating ROA highlights the fluctuations in the company's efficiency in generating operating income relative to its asset base. The varying trends over the years underscore the importance of monitoring operational performance to ensure sustained profitability and effective asset utilization.