Shake Shack Inc (SHAK)
Return on assets (ROA)
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | 10,207 | 20,264 | -25,967 | -10,111 | -45,534 |
| Total assets | US$ in thousands | 1,696,970 | 1,605,860 | 1,494,860 | 1,457,570 | 1,145,350 |
| ROA | 0.60% | 1.26% | -1.74% | -0.69% | -3.98% |
December 31, 2024 calculation
ROA = Net income ÷ Total assets
= $10,207K ÷ $1,696,970K
= 0.60%
Based on the provided data for Shake Shack Inc's return on assets (ROA) from December 31, 2020, to December 31, 2024, the company's performance can be analyzed as follows:
1. The ROA for Shake Shack Inc was -3.98% as of December 31, 2020. A negative ROA indicates that the company's net income was insufficient to cover its total assets, implying a lack of profitability from its asset base. This could be a concerning sign for investors and stakeholders.
2. The ROA improved to -0.69% as of December 31, 2021, but still remained negative. While the improvement is a positive trend, a negative ROA suggests that the company is not efficiently utilizing its assets to generate profits.
3. By December 31, 2022, the ROA further decreased to -1.74%, indicating a decline in the company's profitability relative to its asset base. This trend may signal operational inefficiencies or challenges that Shake Shack Inc may be facing.
4. However, there was a notable improvement in the company's performance by December 31, 2023, with the ROA turning positive at 1.26%. This indicates that Shake Shack Inc was able to generate a profit from its assets, showcasing better operational performance and potential growth opportunities.
5. Subsequently, as of December 31, 2024, the ROA slightly increased to 0.60%. While the ROA remained positive, the marginal increase might suggest a stabilization or a modest growth in profitability relative to its asset base.
In summary, Shake Shack Inc's return on assets shows fluctuations over the years, with the company transitioning from negative ROA to positive ROA. Investors and stakeholders should monitor the trend in ROA to assess the company's ability to generate profits from its assets effectively.
Peer comparison
Dec 31, 2024