NewMarket Corporation (NEU)

Operating return on assets (Operating ROA)

Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Operating income US$ in thousands 590,036 483,045 355,139 257,782 311,802
Total assets US$ in thousands 3,129,540 2,308,870 2,406,820 2,558,440 1,933,880
Operating ROA 18.85% 20.92% 14.76% 10.08% 16.12%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $590,036K ÷ $3,129,540K
= 18.85%

Operating return on assets (ROA) is a key financial metric that indicates how efficiently a company is utilizing its assets to generate operating profits. In the case of NewMarket Corporation, the trend of operating ROA over the past five years has shown some fluctuations.

- As of December 31, 2020, the operating ROA was 16.12%. This level suggests that for every dollar of assets, the company generated operating income of 16.12 cents.
- By December 31, 2021, the operating ROA had decreased to 10.08%, indicating a decline in the company's efficiency in generating operating profits relative to its asset base.
- The trend reversed in the following year, December 31, 2022, with the operating ROA increasing to 14.76%. This improvement suggests better asset utilization and operational performance.
- A further positive trend was noted by December 31, 2023, as the operating ROA jumped to 20.92%, indicating a significant increase in efficiency and profitability relative to the company's asset base.
- The most recent data available, as of December 31, 2024, showed a slight decrease in operating ROA to 18.85%. While lower than the previous year, this figure still indicates strong operational performance and efficient asset utilization.

Overall, the fluctuation in NewMarket Corporation's operating ROA over the five-year period may reflect changes in the company's operational efficiency, profitability, and asset management practices. It is essential for stakeholders to closely monitor these metrics to assess the company's ability to generate profits from its assets effectively.