Patrick Industries Inc (PATK)

Operating return on assets (Operating ROA)

		Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019	Mar 31, 2019
Operating income (ttm)	US$ in thousands	260,200	270,511	292,197	390,649	496,170	523,235	523,747	444,986	351,712	319,179	285,735	202,575	173,373	147,191	124,772	157,895	154,442	157,358	164,657	172,483
Total assets	US$ in thousands	2,562,450	2,655,940	2,707,030	2,816,830	2,782,470	2,896,650	3,024,830	2,971,380	2,650,730	2,358,460	2,224,710	1,834,880	1,753,440	1,574,940	1,492,800	1,522,160	1,470,990	1,451,130	1,330,910	1,355,180
Operating ROA		10.15%	10.19%	10.79%	13.87%	17.83%	18.06%	17.31%	14.98%	13.27%	13.53%	12.84%	11.04%	9.89%	9.35%	8.36%	10.37%	10.50%	10.84%	12.37%	12.73%

December 31, 2023 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $260,200K ÷ $2,562,450K
= 10.15%

Operating Return on Assets (operating ROA) is a key measure of a company's profitability and efficiency in generating earnings from its assets. By analyzing the trend of Patrick Industries, Inc.'s operating ROA based on the provided data, several observations can be made:

1. The operating ROA has been consistently above 10% throughout all quarters, indicating the company's ability to generate earnings from its operating activities relative to its total assets.

2. There is a slight fluctuation in the operating ROA over the quarters, with the highest recorded in Q1 2022 at 17.83% and the lowest in Q4 2023 at 10.15%. This could suggest variations in the company's operating performance and asset utilization during these periods.

3. Despite some fluctuations, the overall trend appears to show a gradual decline in the operating ROA from Q1 2022 to Q4 2023. This could raise concerns about the company's efficiency in generating profits from its assets over time.

4. It is important to further investigate the factors contributing to the changes in operating ROA, such as changes in operating expenses, revenue trends, asset turnover, and capital structure, to get a better understanding of the company's operational efficiency and financial performance.

In conclusion, while Patrick Industries, Inc. has maintained a relatively healthy operating ROA above 10% over the quarters, a decreasing trend in this ratio raises a flag for further analysis to assess the company's operational effectiveness and potential areas for improvement.