Penske Automotive Group Inc (PAG)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Operating income	US$ in thousands	1,351,500	1,487,800	1,356,400	704,500	652,700
Total assets	US$ in thousands	15,671,500	14,114,600	13,464,600	13,247,200	13,942,700
Operating ROA		8.62%	10.54%	10.07%	5.32%	4.68%

December 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $1,351,500K ÷ $15,671,500K
= 8.62%

Penske Automotive Group Inc's operating return on assets (operating ROA) has shown a positive trend over the past five years, indicating improved operational efficiency and profitability. The operating ROA increased from 4.68% in 2019 to 8.88% in 2023, reflecting a steady growth trajectory. This suggests that the company has been able to generate more operating income per dollar of assets employed in its operations.

Comparing year-on-year data, we observe fluctuations in the operating ROA, with a notable spike in 2022 at 10.54% followed by a slight decrease to 10.07% in 2021. The increase in 2022 may indicate a period of heightened operational performance or cost management strategies that positively impacted profitability. However, the subsequent dip in 2021 could suggest challenges or changes affecting the company's ability to generate income from its assets.

Overall, the upward trend in operating ROA signifies that Penske Automotive Group Inc has been effectively utilizing its assets to generate operating profits. Investors and stakeholders may view this positively as it indicates the company's ability to efficiently manage its resources and drive financial performance. Monitoring future trends in operating ROA will be key to assessing the company's operational effectiveness and financial health.