Ingevity Corp (NGVT)

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 369,000 396,800 452,600 422,200 397,900
Total assets US$ in thousands 2,022,600 2,623,300 2,736,500 2,469,000 2,334,500
Operating ROA 18.24% 15.13% 16.54% 17.10% 17.04%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $369,000K ÷ $2,022,600K
= 18.24%

Operating Return on Assets (Operating ROA) is a key profitability ratio that measures a company's ability to generate earnings from its operating activities relative to its total assets. Higher values indicate better efficiency in generating profits from its assets.

Analyzing Ingevity Corp's Operating ROA over the past five years reveals some fluctuations in the company's profitability. In December 31, 2020, the Operating ROA was 17.04%, indicating that the company was able to generate $0.1704 in operating profit for every $1 of assets. This figure slightly increased to 17.10% by December 31, 2021, suggesting improved profitability.

However, in December 31, 2022, the Operating ROA decreased to 16.54%, indicating a slight decline in the company's ability to generate profits from its assets. This trend continued in December 31, 2023, with the Operating ROA dropping further to 15.13%. This suggests potential challenges or inefficiencies in managing assets to drive operating earnings during that period.

Nevertheless, by December 31, 2024, the Operating ROA rebounded significantly to 18.24%, surpassing the levels seen in the previous years. This improvement could indicate that the company implemented strategic measures to enhance operational efficiency and profitability.

Overall, fluctuations in Ingevity Corp's Operating ROA over the analyzed period point to varying levels of asset utilization and operational performance. It is essential for the company to maintain a focus on optimizing asset management and operational efficiency to sustain and improve profitability in the future.