SolarEdge Technologies Inc (SEDG)

Operating return on assets (Operating ROA)

		Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019
Operating income (ttm)	US$ in thousands	-588,194	-277,654	40,205	272,623	373,756	259,410	166,120	212,321	194,328	213,875	207,139	180,528	144,508	118,914	142,561	178,662	214,285	229,673	189,946	102,861
Total assets	US$ in thousands	3,948,210	4,166,820	4,587,730	4,651,150	4,696,560	4,496,430	4,265,950	3,903,550	3,772,780	3,682,920	2,900,950	2,656,830	2,564,320	2,464,600	2,437,110	2,278,300	1,605,830	1,513,840	1,494,620	1,337,590
Operating ROA		-14.90%	-6.66%	0.88%	5.86%	7.96%	5.77%	3.89%	5.44%	5.15%	5.81%	7.14%	6.79%	5.64%	4.82%	5.85%	7.84%	13.34%	15.17%	12.71%	7.69%

June 30, 2024 calculation

Operating ROA = Operating income (ttm) ÷ Total assets
= $-588,194K ÷ $3,948,210K
= -14.90%

Operating return on assets (ROA) measures a company's efficiency in generating operating profits relative to its total assets. For SolarEdge Technologies Inc, the operating ROA has fluctuated over the past few quarters. The trend shows a decline in operating ROA from an impressive 15.17% in March 2020 to -6.66% in March 2024. This significant decrease indicates a drop in the company's ability to generate operating profits relative to its asset base.

The negative operating ROA in the latest quarter, -6.66% in June 2024, suggests that the company's operating profits were insufficient to cover the cost of its assets. This could be a red flag for investors and stakeholders as it signifies potential financial distress or inefficiencies in the company's operations. It is important for the company to address this downward trend and work towards improving its operational efficiency and profitability to enhance its financial performance and sustainability in the long term.