McCormick & Company Incorporated (MKC)
Operating return on assets (Operating ROA)
| Nov 30, 2024 | Aug 31, 2024 | May 31, 2024 | Feb 29, 2024 | Nov 30, 2023 | Aug 31, 2023 | May 31, 2023 | Feb 28, 2023 | Nov 30, 2022 | Aug 31, 2022 | May 31, 2022 | Feb 28, 2022 | Nov 30, 2021 | Aug 31, 2021 | May 31, 2021 | Feb 28, 2021 | Nov 30, 2020 | Aug 31, 2020 | May 31, 2020 | Feb 29, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating income (ttm) | US$ in thousands | 1,060,300 | 1,051,300 | 1,009,800 | 997,500 | 963,000 | 930,100 | 920,300 | 855,700 | 863,600 | 875,500 | 905,500 | 985,700 | 1,015,100 | 1,013,800 | 1,021,600 | 1,041,600 | 999,500 | 1,023,800 | 1,004,300 | 955,000 |
| Total assets | US$ in thousands | 13,070,300 | 13,204,900 | 12,987,600 | 12,890,100 | 12,862,300 | 12,990,100 | 12,908,200 | 13,205,400 | 13,124,900 | 12,941,000 | 12,957,900 | 12,940,800 | 12,905,800 | 12,884,400 | 12,810,500 | 12,685,100 | 12,089,700 | 10,860,700 | 10,576,100 | 10,491,700 |
| Operating ROA | 8.11% | 7.96% | 7.78% | 7.74% | 7.49% | 7.16% | 7.13% | 6.48% | 6.58% | 6.77% | 6.99% | 7.62% | 7.87% | 7.87% | 7.97% | 8.21% | 8.27% | 9.43% | 9.50% | 9.10% |
November 30, 2024 calculation
Operating ROA = Operating income (ttm) ÷ Total assets
= $1,060,300K ÷ $13,070,300K
= 8.11%
Operating return on assets (Operating ROA) is an essential financial ratio that measures a company's ability to generate operating income from its assets. The trend analysis of McCormick & Company Incorporated's Operating ROA from February 29, 2020, to November 30, 2024, reveals fluctuations over the period.
The Operating ROA started at a relatively healthy level of 9.10% in February 2020. It increased slightly to 9.50% by May 2020 before experiencing a slight decline to 9.43% in August 2020. However, in the subsequent quarters, the ratio showed a downward trend, dipping to 8.27% in November 2020 and further declining to 7.97% by May 2021.
The decreasing trend continued into the following quarters, with Operating ROA decreasing to 6.77% by August 2022. However, there was a slight improvement in the ratio in the subsequent periods, reaching 8.11% by November 30, 2024.
Overall, the trend analysis indicates that McCormick & Company Inc. faced challenges in generating operating income relative to its assets during certain periods, as evident from the declining Operating ROA. The company managed to improve its efficiency in utilizing assets to generate operating income towards the later quarters of the analyzed period, leading to a slight recovery in the Operating ROA.
It is important for stakeholders to closely monitor the Operating ROA trend to assess the company's operational efficiency and profitability metrics. Further strategic initiatives may be required to sustain or enhance the Operating ROA in the future.