Murphy Oil Corporation (MUR)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Operating income (ttm)	US$ in thousands	550,354	751,451	949,934	932,253	1,042,028	1,163,320	1,538,899	1,925,630	1,917,263	1,903,155	1,373,438	831,614	281,435	-184,195	-685,621	-1,069,542	-1,362,309	-1,243,445	-738,926	-193,786
Total assets	US$ in thousands	9,667,480	9,716,420	9,893,720	9,668,660	9,766,700	9,942,580	10,249,500	10,188,500	10,309,000	10,229,200	10,572,200	10,541,700	10,304,900	10,330,900	10,604,200	10,284,300	10,620,800	10,469,400	10,754,000	11,205,800
Operating ROA		5.69%	7.73%	9.60%	9.64%	10.67%	11.70%	15.01%	18.90%	18.60%	18.61%	12.99%	7.89%	2.73%	-1.78%	-6.47%	-10.40%	-12.83%	-11.88%	-6.87%	-1.73%

December 31, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $550,354K ÷ $9,667,480K
= 5.69%

Operating return on assets (Operating ROA) is a financial ratio that measures a company's operating income generated relative to its total assets. A positive Operating ROA indicates that the company is effectively utilizing its assets to generate profits, while a negative Operating ROA suggests that the company is not generating sufficient profits from its assets.

In the case of Murphy Oil Corporation, the Operating ROA showed a negative trend from March 2020 to June 2022, with values ranging from -1.73% to -6.47%. This indicates that during this period, the company was facing challenges in generating operating income relative to its asset base. However, there was a significant turnaround starting from September 2022, with the Operating ROA steadily increasing to reach a peak of 18.90% by March 2023.

Subsequently, the Operating ROA experienced some fluctuations but generally remained at healthy levels between 9.60% to 18.61% for the period from June 2023 to September 2024. This suggests that Murphy Oil Corporation improved its operational efficiency and profitability, effectively leveraging its assets to generate higher operating income.

It is essential for investors and stakeholders to monitor the Operating ROA over time to assess the company's operational performance and asset utilization efficiency. A sustained positive trend in Operating ROA indicates that the company is effectively managing its assets and operations to generate profits and create value for shareholders.