RXO Inc. (RXO)

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	-56,000	39,000	123,000	192,000	80,000
Total assets	US$ in thousands	3,414,000	1,825,000	2,038,000	2,068,000	1,870,000
Operating ROA		-1.64%	2.14%	6.04%	9.28%	4.28%

December 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $-56,000K ÷ $3,414,000K
= -1.64%

Operating return on assets (Operating ROA) is a key financial metric that indicates how efficiently a company generates profits from its assets used in operations.

Analyzing the trend of RXO Inc.'s Operating ROA over the past five years reveals fluctuations in its operational efficiency. In 2020, the company had an Operating ROA of 4.28%, which increased significantly to 9.28% by the end of 2021. This sharp improvement suggests that the company was able to generate more operating income relative to its assets during this period.

However, in 2022, RXO Inc.'s Operating ROA decreased to 6.04%, indicating a slight decline in operational efficiency compared to the previous year. The further decline to 2.14% by the end of 2023 suggests that the company faced challenges in generating profits from its operational assets during that year.

The most concerning development occurred by the end of 2024, when RXO Inc. recorded a negative Operating ROA of -1.64%. A negative Operating ROA indicates that the company's operating income was insufficient to cover the operating costs associated with its assets, which could be a red flag for investors and stakeholders.

Overall, the fluctuating trend of RXO Inc.'s Operating ROA highlights the company's varying operational performance and efficiency in utilizing its assets to generate profits. Investors and analysts may need to closely monitor the company's financial health and operational strategies going forward to assess its long-term sustainability and profitability.