Neogen Corporation (NEOG)

Operating return on assets (Operating ROA)

		Feb 28, 2025	Nov 30, 2024	Aug 31, 2024	May 31, 2024	Feb 29, 2024	Nov 30, 2023	Aug 31, 2023	May 31, 2023	Feb 28, 2023	Nov 30, 2022	Aug 31, 2022	May 31, 2022	Feb 28, 2022	Nov 30, 2021	Aug 31, 2021	May 31, 2021	Feb 28, 2021	Nov 30, 2020	Aug 31, 2020	May 31, 2020
Operating income (ttm)	US$ in thousands	-432,240	-425,632	46,317	63,195	69,048	45,238	23,117	10,044	-1,215	10,627	30,752	46,435	54,524	70,243	77,019	74,169	73,858	71,127	70,154	67,523
Total assets	US$ in thousands	4,036,340	4,054,090	4,503,170	4,584,160	4,582,490	4,602,420	4,561,100	4,554,430	4,508,760	4,563,240	977,405	992,929	979,898	966,680	932,106	920,192	880,216	845,626	821,592	797,182
Operating ROA		-10.71%	-10.50%	1.03%	1.38%	1.51%	0.98%	0.51%	0.22%	-0.03%	0.23%	3.15%	4.68%	5.56%	7.27%	8.26%	8.06%	8.39%	8.41%	8.54%	8.47%

February 28, 2025 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $-432,240K ÷ $4,036,340K
= -10.71%

Neogen Corporation's operating return on assets (operating ROA) shows a fluctuating trend over the specified period. Starting at 8.47% in May 2020, the operating ROA remained relatively stable around the 8% mark until August 2021. However, there was a noticeable decline after that, with the ratio dropping to 3.15% by August 2022, and even further to -10.71% by February 2025.

This downward trend indicates a decrease in the company's ability to generate profits from its assets through operations. The negative values in the latter half of the period suggest that Neogen Corporation may have faced challenges in effectively utilizing its assets to generate operating income.

It is essential for the company to closely monitor its operating ROA and take necessary strategic actions to improve operational efficiency and asset utilization to reverse this negative trend and enhance profitability.