Photronics Inc (PLAB)

Operating return on assets (Operating ROA)

		Oct 31, 2023	Oct 31, 2022	Oct 31, 2021	Oct 31, 2020	Oct 31, 2019
Operating income	US$ in thousands	253,050	211,866	94,554	63,928	52,121
Total assets	US$ in thousands	1,526,220	1,315,830	1,294,200	1,188,180	1,118,660
Operating ROA		16.58%	16.10%	7.31%	5.38%	4.66%

October 31, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $253,050K ÷ $1,526,220K
= 16.58%

Photronics, Inc.'s operating return on assets (operating ROA) has shown a consistent improvement over the past five years, indicating the company's ability to generate higher operating income relative to its asset base.

In 2019, Photronics' operating ROA stood at 4.66%, indicating that for every dollar of assets, the company generated operating income of 4.66 cents. Over the subsequent years, there has been a steady upward trend, with the operating ROA climbing to 5.38% in 2020, 7.03% in 2021, 16.10% in 2022, and reaching 16.58% in 2023.

The increasing trend in operating ROA suggests that Photronics has been effectively utilizing its assets to generate operating income, reflecting improved operational efficiency and profitability. This may be a result of better cost management, increased sales, or improved asset utilization.

The rising trend in operating ROA is a positive signal for investors and stakeholders as it indicates the company's improving ability to generate profits from its assets. However, it's important to assess this trend in conjunction with other financial indicators and market conditions to gain a comprehensive understanding of Photronics' overall financial performance and prospects.