Nordson Corporation (NDSN)
Operating return on assets (Operating ROA)
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 672,761 | 702,360 | 615,127 | 349,545 | 483,113 |
| Total assets | US$ in thousands | 5,251,770 | 3,820,380 | 3,790,960 | 3,674,660 | 3,516,450 |
| Operating ROA | 12.81% | 18.38% | 16.23% | 9.51% | 13.74% |
October 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $672,761K ÷ $5,251,770K
= 12.81%
Operating return on assets (ROA) is a crucial financial metric that reflects a company's efficiency in generating profits from its assets utilized in operations. Nordson Corp.'s operating ROA has exhibited fluctuations over the past five years. In the year ending October 31, 2023, Nordson Corp.'s operating ROA was 12.81%, marking a decline from the previous year's figure of 18.38%. This reduction indicates that Nordson Corp. may have experienced challenges in generating operating income in relation to its total assets in the most recent period.
Comparing the operating ROA to earlier years, it is evident that there has been variability in the company's ability to generate profits from its operational assets over the past five years. The operating ROA was highest in October 2022 at 18.38% and lowest in October 2020 at 11.89%. This fluctuation suggests that Nordson Corp.'s operational efficiency and profitability may have been subject to internal and external factors influencing its business operations during this period.
It is important for stakeholders to thoroughly evaluate the reasons behind these fluctuations in Nordson Corp.'s operating ROA, as it indicates the company's ability to effectively utilize its assets to generate operational profits. The declining trend in operating ROA signifies the potential necessity for Nordson Corp. to reassess its operational strategies to enhance asset efficiency and profitability.
Peer comparison
Oct 31, 2023