Penguin Solutions, Inc. (PENG)

Return on assets (ROA)

		Aug 31, 2024	Aug 31, 2023	Aug 31, 2022	Aug 31, 2021	Aug 31, 2020
Net income	US$ in thousands	-52,472	-187,526	66,557	21,310	-1,143
Total assets	US$ in thousands	1,474,510	1,505,960	1,572,060	1,344,800	786,608
ROA		-3.56%	-12.45%	4.23%	1.58%	-0.15%

August 31, 2024 calculation

ROA = Net income ÷ Total assets
= $-52,472K ÷ $1,474,510K
= -3.56%

The analysis of Penguin Solutions, Inc.'s return on assets (ROA) over the period from August 31, 2020, to August 31, 2024, reveals notable fluctuations indicative of varying operational performance and asset utilization.

In August 2020, the company reported a negative ROA of -0.15%, suggesting that the firm was operating at a loss relative to its asset base during that period. This negative figure points to potential operational challenges or a period of strategic investment not yet yielding positive returns.

By August 2021, the ROA improved significantly to 1.58%, moving into positive territory and indicating that the company was beginning to generate net income from its assets. This suggests a recovery or improvement in operational efficiency or profitability.

The upward trend continued into August 2022, with the ROA further increasing to 4.23%. Such an increase reflects a robust improvement in the company's ability to utilize its assets to generate earnings, possibly due to enhanced sales, cost management, or efficiency gains.

However, the financial performance experienced a downturn by August 2023, with the ROA plummeting to -12.45%. This significant decline implies a substantial deterioration in profitability and asset efficiency, which could be attributable to increased expenses, lower revenue, or extraordinary losses. The negative figure indicates that the company was no longer generating sufficient earnings to cover its asset base during this period.

In August 2024, the ROA slightly recovered to -3.56%, indicating some degree of improvement from the previous year, yet remaining in negative territory. Although there is a positive trend toward zero, the continued negative ROA suggests persistent challenges in converting assets into profits.

Overall, Penguin Solutions, Inc. exhibited a period of recovery following a loss in 2020, achieving positive ROA figures in 2021 and 2022, but then faced a pronounced setback in 2023. The partial recovery in 2024 signals ongoing difficulties in returning to sustained profitability and efficient asset utilization.