Neogen Corporation (NEOG)

Return on assets (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
Net income (ttm) US$ in thousands -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 59,475
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
ROA -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% 7.46%

February 28, 2025 calculation

ROA = Net income (ttm) ÷ Total assets
= $-485,263K ÷ $4,036,340K
= -12.02%

Neogen Corporation's return on assets (ROA) has shown a declining trend over the period analyzed, starting at 7.46% on May 31, 2020, and decreasing to -12.02% by February 28, 2025. The ROA peaked in May 2020 and has been mostly decreasing since then, with occasional fluctuations.

A positive ROA reflects the company's ability to generate profit from its assets, whereas a negative ROA indicates the company is not effectively utilizing its assets to generate profits. Neogen Corporation's deteriorating ROA suggests a declining profitability relative to the size of its asset base over time, raising concerns about its operational efficiency and potential financial challenges.

It would be crucial for Neogen Corporation to closely analyze the factors contributing to the decreasing ROA and take necessary strategic actions to improve efficiency, profitability, and asset management in order to enhance financial performance and ensure long-term sustainability.