McCormick & Company Incorporated (MKC)
Return on assets (ROA)
| Nov 30, 2023 | Nov 30, 2022 | Nov 30, 2021 | Nov 30, 2020 | Nov 30, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 680,600 | 682,000 | 755,300 | 747,400 | 702,700 |
| Total assets | US$ in thousands | 12,862,300 | 13,124,900 | 12,905,800 | 12,089,700 | 10,362,100 |
| ROA | 5.29% | 5.20% | 5.85% | 6.18% | 6.78% |
November 30, 2023 calculation
ROA = Net income ÷ Total assets
= $680,600K ÷ $12,862,300K
= 5.29%
The return on assets (ROA) for McCormick & Co., Inc. has shown a downward trend over the past five years, decreasing from 6.78% in 2019 to 5.29% in 2023. This indicates that the company's ability to generate profits from its assets has declined over the period.
The decreasing trend in ROA may be a concern for investors and stakeholders, as it suggests that the company is becoming less efficient in using its assets to generate earnings. It could also signify a potential decline in the company's overall profitability or a decrease in the effectiveness of its asset utilization.
Further analysis, such as comparing the ROA to industry benchmarks or assessing the company's asset turnover ratio, would provide additional insights into the reasons behind this decline in ROA. Additionally, evaluating the company's profitability, asset structure, and asset management would help in understanding the factors contributing to the decreasing trend in ROA.