Phillips 66 (PSX)

Return on assets (ROA)

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	7,015,000	11,024,000	1,317,000	-3,975,000	3,076,000
Total assets	US$ in thousands	75,501,000	76,442,000	55,594,000	54,721,000	58,720,000
ROA		9.29%	14.42%	2.37%	-7.26%	5.24%

December 31, 2023 calculation

ROA = Net income ÷ Total assets
= $7,015,000K ÷ $75,501,000K
= 9.29%

Phillips 66's return on assets (ROA) has demonstrated fluctuations over the past five years. In 2023, the ROA decreased to 9.28% from 14.41% in 2022, indicating a decline in the company's ability to generate profit from its assets compared to the previous year. This reduction could be attributed to various factors such as changes in operating efficiency, asset utilization, or profitability.

Looking at the trend over the five-year period, the company experienced a significant improvement in ROA from 2019 to 2022, where it turned negative ROA in 2020 into positive figures, reaching its peak at 14.41% in 2022. This suggests that Phillips 66 made effective use of its assets to generate profits during those years.

However, the sharp decline in ROA in 2023 raises some concerns about the company's asset management and profitability. Investors and analysts should further investigate the reasons behind this decrease to assess the company's operational performance and financial health accurately.

Overall, while Phillips 66 has shown an ability to generate profits from its assets in the past, the recent decline in ROA underscores the importance of monitoring financial ratios to gain insights into a company's performance and make informed investment decisions.