Parsons Corp (PSN)

Operating return on assets (Operating ROA)

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Operating income	US$ in thousands	428,066	288,358	185,666	132,446	177,815
Total assets	US$ in thousands	5,487,960	4,804,060	4,198,140	3,830,940	3,937,700
Operating ROA		7.80%	6.00%	4.42%	3.46%	4.52%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $428,066K ÷ $5,487,960K
= 7.80%

Operating return on assets (ROA) is an important financial ratio that indicates the efficiency of a company in generating operating profit from its asset base. The trend of Parsons Corp's operating ROA over the period from December 31, 2020, to December 31, 2024, shows fluctuations in performance.

- In December 31, 2020, Parsons Corp reported an operating ROA of 4.52%, indicating that for every dollar of assets, the company generated 4.52 cents of operating profit.
- By December 31, 2021, the operating ROA decreased to 3.46%, signaling a decline in the company's ability to generate operating profit relative to its asset base.
- However, Parsons Corp's performance improved in December 31, 2022, with the operating ROA increasing to 4.42%, suggesting an uptick in efficiency in utilizing its assets to generate operating income.
- The trend continued to improve in December 31, 2023, as the operating ROA further increased to 6.00%, indicating a significant enhancement in operational efficiency and profitability.
- By December 31, 2024, Parsons Corp demonstrated a substantial improvement in performance, achieving an operating ROA of 7.80%, reflecting the company's ability to generate higher operating profits relative to its asset base.

Overall, the fluctuating trend in Parsons Corp's operating ROA indicates varying levels of operational efficiency and profitability over the years, with notable improvements in recent periods. It is essential for the company to sustain or enhance this positive trend to ensure continued financial health and success.