Mercury Systems Inc (MRCY)
Operating return on assets (Operating ROA)
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | -147,754 | -21,685 | 31,610 | 81,001 | 91,062 |
| Total assets | US$ in thousands | 2,378,900 | 2,391,370 | 2,304,420 | 1,955,140 | 1,610,720 |
| Operating ROA | -6.21% | -0.91% | 1.37% | 4.14% | 5.65% |
June 30, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $-147,754K ÷ $2,378,900K
= -6.21%
Operating return on assets (operating ROA) is a key profitability ratio that indicates the efficiency of a company in generating profits from its operating activities relative to its total assets. Mercury Systems Inc's operating ROA has shown a declining trend over the past five years, from 5.65% in 2020 to -6.21% in 2024.
The negative operating ROA in 2024 suggests that Mercury Systems Inc's operating income generated from its assets was insufficient to cover the asset base, indicating potential inefficiencies or losses in its operations. This decline in operating ROA raises concerns about the company's ability to effectively utilize its assets to generate profits.
It is essential for Mercury Systems Inc to address the factors contributing to the decreasing trend in operating ROA to improve profitability and operational efficiency. This may involve optimizing asset utilization, improving cost management, enhancing operational performance, and exploring growth opportunities to reverse the negative trend in operating ROA and enhance overall financial performance.
Peer comparison
Jun 30, 2024