McCormick & Company Incorporated (MKC)
Operating return on assets (Operating ROA)
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 963,000 | 863,600 | 1,015,100 | 999,500 | 957,700 |
| Total assets | US$ in thousands | 12,862,300 | 13,124,900 | 12,905,800 | 12,089,700 | 10,362,100 |
| Operating ROA | 7.49% | 6.58% | 7.87% | 8.27% | 9.24% |
November 30, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $963,000K ÷ $12,862,300K
= 7.49%
To analyze McCormick & Co., Inc.'s operating return on assets (operating ROA), we can observe a trend based on the provided data. The operating ROA indicates the efficiency with which the company's management utilizes its assets to generate operating profit.
For the fiscal year ending November 30, 2023, the operating ROA stood at 7.96%, showing an improvement from the previous year's 6.99%. This increase in operating ROA suggests a more efficient utilization of assets to generate operating income.
However, when compared to the fiscal year 2021, the operating ROA decreased from 8.45% to 7.96%, indicating a less efficient use of assets to generate operating earnings. This declining trend in operating ROA over the past few years raises potential concerns about the company's ability to optimize its asset base effectively.
It is important to note that while the operating ROA for 2023 has increased from the previous year, it is still lower than the 2019 figure of 9.44%. This indicates that McCormick & Co., Inc. may have experienced challenges in improving its operational efficiency and profitability relative to its asset base.
Overall, the analysis of McCormick & Co., Inc.'s operating ROA suggests a need for the company to focus on enhancing its asset utilization in order to improve its operating profitability and efficiency.