McCormick & Company Incorporated (MKC)
Operating return on assets (Operating ROA)
| Nov 30, 2024 | Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,060,300 | 963,000 | 863,600 | 1,015,100 | 999,500 |
| Total assets | US$ in thousands | 13,070,300 | 12,862,300 | 13,124,900 | 12,905,800 | 12,089,700 |
| Operating ROA | 8.11% | 7.49% | 6.58% | 7.87% | 8.27% |
November 30, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $1,060,300K ÷ $13,070,300K
= 8.11%
Operating Return on Assets (Operating ROA) is a key financial ratio that measures a company's efficiency in generating profits from its assets used in operations. Considering the data provided for McCormick & Company Incorporated over the five-year period from November 30, 2020, to November 30, 2024, we observe fluctuations in the company's operating ROA.
In November 2020, McCormick reported an operating ROA of 8.27%, indicating that the company generated $8.27 in operating income for every $100 of assets employed in its operations. However, over the subsequent years, there was a slight decline in the operating ROA, reaching 7.87% in November 2021 and further dropping to 6.58% in November 2022, implying a decrease in profitability relative to asset utilization.
The trend reversed in November 2023 when the operating ROA increased to 7.49%, suggesting improved efficiency in utilizing assets to generate operating income. Subsequently, in November 2024, McCormick demonstrated a further improvement in its operating ROA, reaching 8.11%.
The fluctuations in operating ROA over the period indicate changes in McCormick's operational efficiency and profitability relative to its asset base. It is essential for investors and stakeholders to closely monitor these trends to assess the company's ability to effectively utilize its assets to generate profits and create long-term value.