Neogen Corporation (NEOG)

Return on assets (ROA)

May 31, 2025 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
Net income (ttm) US$ in thousands -1,092,044 -485,263 -476,328 -23,533 -9,421 1,566 11,778 -26,576 -22,870 -13,483 -16,230 36,439 48,307 49,108 57,042 62,099 60,882 61,469 60,292 60,683
Total assets US$ in thousands 3,443,840 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
ROA -31.71% -12.02% -11.75% -0.52% -0.21% 0.03% 0.26% -0.58% -0.50% -0.30% -0.36% 3.73% 4.87% 5.01% 5.90% 6.66% 6.62% 6.98% 7.13% 7.39%

May 31, 2025 calculation

ROA = Net income (ttm) ÷ Total assets
= $-1,092,044K ÷ $3,443,840K
= -31.71%

The analysis of Neogen Corporation's Return on Assets (ROA) over the designated periods reveals a notable downward trend, transitioning from positive to negative territory in late 2022 and deteriorating further through 2024 and into 2025. Initially, as of August 31, 2020, the ROA stood at 7.39%, indicating effective utilization of assets to generate earnings. During subsequent quarters through mid-2021, the ROA experienced marginal decline, reaching approximately 6.62% by May 31, 2021, before stabilizing slightly above 6.6% up to August 31, 2021.

However, starting from late 2021, a steady decline in ROA is observed. By November 30, 2021, the figure dropped to 5.90%, and this downward trend persisted sharply into 2022, with ROA falling to 5.01% in February and 4.87% in May. The decline accelerated further, reaching 3.73% in August 2022. Subsequently, the ROA turned negative for the first time on November 30, 2022, at -0.36%, indicating that the company's earnings were insufficient to cover its assets' costs during that period.

The negative trajectory continued through 2023, with ROA declining to -0.50% as of May 31, 2023, and slightly improving marginally to -0.30% by February 28, 2023. By August 31, 2023, the ratio further decreased to -0.58%. March 2024 marked a minor positive turnaround with a small ROA of 0.03%, but this was short-lived; subsequent periods reflected a deterioration, with ROA reverting to negative territory, notably reaching -11.75% on November 30, 2024, and further declining to -12.02% in February 2025. The trajectory indicates a substantial and ongoing decline in asset profitability, culminating in an ROA of -31.71% by May 31, 2025.

This pattern suggests that the company's ability to generate net income relative to its total assets has significantly deteriorated over the observed interval. The shift from positive to negative ROA signifies that Neogen Corporation has experienced periods of unprofitable asset utilization, increasingly so in recent periods, implying challenges in maintaining effective operational efficiency or profitability levels.