Somnigroup International Inc. (SGI)
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 | 634,200 | 607,200 | 680,600 | 912,300 | 532,100 |
| Total assets | US$ in thousands | 5,980,400 | 4,553,900 | 4,359,800 | 4,323,400 | 3,308,600 |
| Operating ROA | 10.60% | 13.33% | 15.61% | 21.10% | 16.08% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $634,200K ÷ $5,980,400K
= 10.60%
Operating Return on Assets (Operating ROA) is a key profitability ratio that measures a company's ability to generate earnings from its operating activities relative to its total assets.
Analyzing Somnigroup International Inc.'s Operating ROA over the past five years reveals a fluctuating trend.
On December 31, 2020, the company had an Operating ROA of 16.08%, indicating that for each dollar of assets, it generated 16.08 cents in operating income. This ratio increased to 21.10% by December 31, 2021, reflecting improved efficiency in utilizing assets to generate operating profits.
However, the trend reversed in the following years. By December 31, 2022, the Operating ROA decreased to 15.61%, signifying a reduction in the company's ability to generate operating profits from its assets. This decline continued with a further decrease to 13.33% by December 31, 2023, and a notable drop to 10.60% by December 31, 2024, indicating diminishing profitability relative to the total assets employed.
The decreasing trend in Operating ROA suggests that Somnigroup International Inc. may be facing challenges in efficiently utilizing its assets to generate operating income. It would be important for the company to evaluate its operational efficiency and asset management strategies to enhance profitability and improve its overall financial performance in the upcoming periods.
Peer comparison
Dec 31, 2024