Shake Shack Inc (SHAK)
Operating return on assets (Operating ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 5,921 | -26,894 | -15,853 | -43,876 | 25,685 |
| Total assets | US$ in thousands | 1,605,860 | 1,511,950 | 1,457,570 | 1,145,350 | 968,268 |
| Operating ROA | 0.37% | -1.78% | -1.09% | -3.83% | 2.65% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $5,921K ÷ $1,605,860K
= 0.37%
Operating ROA is a key metric that measures a company's ability to generate profits from its operating activities relative to its total assets. For Shake Shack Inc, the operating ROA has been quite volatile over the past five years, ranging from -3.83% in 2020 to 2.65% in 2019. In 2023, the operating ROA improved to 0.37% from negative figures in the previous two years.
A positive operating ROA indicates that Shake Shack Inc is able to efficiently generate profits from its core operations in relation to its asset base. However, the low percentages suggest that the company may be facing challenges in improving profitability relative to its assets. The negative figures in 2020 and 2021 indicate that the company was not effectively utilizing its assets to generate operating income during those years.
It is important for Shake Shack Inc to continue monitoring and improving its operating ROA to ensure better efficiency in utilizing its assets and enhancing profitability from its core operations. Further analysis of the company's operational efficiency and asset management may help identify areas for improvement to enhance its operating ROA in the future.
Peer comparison
Dec 31, 2023