Stepan Company (SCL)
Return on assets (ROA)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 50,370 | 40,204 | 147,153 | 137,804 | 126,770 |
| Total assets | US$ in thousands | 2,304,650 | 2,363,350 | 2,433,170 | 2,065,610 | 1,752,340 |
| ROA | 2.19% | 1.70% | 6.05% | 6.67% | 7.23% |
December 31, 2024 calculation
ROA = Net income ÷ Total assets
= $50,370K ÷ $2,304,650K
= 2.19%
The return on assets (ROA) for Stepan Company has exhibited a declining trend over the past five years, starting at 7.23% as of December 31, 2020, and decreasing to 2.19% as of December 31, 2024. This suggests that the company's ability to generate profits from its assets has weakened over this period.
The decreasing ROA may indicate inefficiencies in asset utilization or declining profitability relative to the size of the asset base. Stepan Company may be facing challenges in effectively deploying its resources to generate earnings, which could impact its overall financial performance and competitiveness in the market.
It is important for Stepan Company to closely assess the factors contributing to the declining ROA and consider strategies to enhance asset productivity and profitability. Monitoring and improving ROA can help the company optimize its use of resources and maximize returns for its investors and stakeholders.
Peer comparison
Dec 31, 2024