Mesa Laboratories Inc (MLAB)

Operating return on assets (Operating ROA)

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Operating income	US$ in thousands	-272,075	3,320	4,702	12,358	7,923
Total assets	US$ in thousands	446,796	661,832	707,369	601,475	409,108
Operating ROA		-60.89%	0.50%	0.66%	2.05%	1.94%

March 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $-272,075K ÷ $446,796K
= -60.89%

The operating return on assets (operating ROA) of Mesa Laboratories Inc has exhibited significant volatility over the past five years. The negative value of -60.89% for the most recent period ending March 31, 2024, is alarming, indicating that the company's operating income generated from its assets is insufficient to cover the assets' value. This could be a sign of inefficiency, poor operational management, or declining asset productivity.

In contrast, the operating ROA was positive in the preceding years, ranging from 0.50% to 2.05%. The improvement seen in 2021 and 2020 suggests that Mesa Laboratories Inc was more effective in utilizing its assets to generate operating income during those years.

The noticeable decline in the operating ROA from 2.05% in 2021 to 0.66% in 2022 and further down to 0.50% in 2023 indicates a potential decrease in asset efficiency and profitability. Further analysis is required to understand the reasons behind this decline and to identify potential areas for improvement within the company's operations.

Overall, the fluctuating trend in Mesa Laboratories Inc's operating ROA raises concerns about the company's operational performance and asset management efficiency. Monitoring this ratio closely and investigating the underlying factors driving these fluctuations will be crucial for assessing the company's financial health and making informed investment decisions.