Select Medical Holdings (SEM)
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 | 268,315 | 554,874 | 403,283 | 713,774 | 567,657 |
| Total assets | US$ in thousands | 5,607,950 | 7,689,630 | 7,665,290 | 7,360,170 | 7,655,400 |
| Operating ROA | 4.78% | 7.22% | 5.26% | 9.70% | 7.42% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $268,315K ÷ $5,607,950K
= 4.78%
Based on the provided data, Select Medical Holdings' operating return on assets (ROA) has shown some fluctuations over the years:
1. December 31, 2020: Operating ROA is 7.42%
2. December 31, 2021: Operating ROA increases to 9.70%
3. December 31, 2022: Operating ROA decreases to 5.26%
4. December 31, 2023: Operating ROA rises slightly to 7.22%
5. December 31, 2024: Operating ROA drops to 4.78%
The operating ROA measures how effectively the company generates operating profits from its assets. A higher operating ROA indicates that the company is more efficient in utilizing its assets to generate profits.
Select Medical Holdings saw an increase in operating ROA from 2020 to 2021, indicating improved profitability relative to its asset base. However, there was subsequent volatility in the operating ROA, with fluctuations in the following years. The decline in operating ROA in 2024 may raise concerns about the company's ability to maintain profitability relative to its assets. It would be important for Select Medical Holdings to further analyze the reasons behind these fluctuations and take appropriate measures to ensure the efficient utilization of its assets in generating profits.
Peer comparison
Dec 31, 2024