Premier Inc (PINC)
Operating return on assets (Operating ROA)
| Jun 30, 2024 | Mar 31, 2024 | 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating income (ttm) | US$ in thousands | 127,972 | 78,788 | 220,083 | 242,556 | 242,093 | 262,246 | 256,504 | 246,302 | 260,073 | 270,815 | 280,181 | 272,221 | 256,917 | 260,397 | 296,019 | 346,548 | 373,620 | 391,546 | 377,702 | 357,932 |
| Total assets | US$ in thousands | 3,401,450 | 3,363,730 | 3,832,530 | 3,849,570 | 3,371,490 | 3,512,520 | 3,539,390 | 3,419,740 | 3,357,130 | 3,515,460 | 3,451,460 | 3,566,920 | 3,522,900 | 3,681,960 | 3,510,800 | 3,441,580 | 2,948,520 | 3,063,070 | 2,616,160 | 2,594,580 |
| Operating ROA | 3.76% | 2.34% | 5.74% | 6.30% | 7.18% | 7.47% | 7.25% | 7.20% | 7.75% | 7.70% | 8.12% | 7.63% | 7.29% | 7.07% | 8.43% | 10.07% | 12.67% | 12.78% | 14.44% | 13.80% |
June 30, 2024 calculation
Operating ROA = Operating income (ttm) ÷ Total assets
= $127,972K ÷ $3,401,450K
= 3.76%
Premier Inc's operating return on assets (operating ROA) has shown fluctuations over the past several quarters. The operating ROA has been gradually decreasing over the last few quarters, from as high as 14.44% in December 2019 to 3.76% in June 2024. This declining trend indicates a potential decrease in the company's operating efficiency in generating profits from its total assets.
The operating ROA was relatively stable around the 7-8% range for a significant period, but more recently, it has decreased to below this range. This could be a cause for concern as it suggests a lower return on the company's operating assets compared to before. The decrease in operating ROA could be attributed to various factors such as increased operating expenses, reduced operational efficiency, or changes in the company's business strategy.
It would be important for Premier Inc to closely evaluate the reasons behind the declining operating ROA and take necessary steps to improve operational performance and asset utilization in order to enhance profitability and create sustainable value for shareholders.
Peer comparison
Jun 30, 2024