Standard Motor Products Inc (SMP)
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 | 80,624 | 92,677 | 104,135 | 128,999 | 108,895 |
| Total assets | US$ in thousands | 1,814,130 | 1,293,050 | 1,254,930 | 1,197,960 | 956,540 |
| Operating ROA | 4.44% | 7.17% | 8.30% | 10.77% | 11.38% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $80,624K ÷ $1,814,130K
= 4.44%
Standard Motor Products Inc's operating return on assets (operating ROA) has experienced a declining trend over the five-year period from 2020 to 2024. In 2020, the operating ROA stood at 11.38%, indicating that the company generated 11.38 cents in operating income for each dollar of assets. However, by 2024, the operating ROA had dropped to 4.44%, signifying a significant decrease in the company's efficiency in utilizing its assets to generate operating earnings.
The declining trend in operating ROA suggests that Standard Motor Products Inc may be facing challenges in managing its operational performance and optimizing asset utilization. Investors and stakeholders may be concerned about the company's ability to generate sustainable operating profits relative to its asset base. Management should focus on improving operational efficiency, cost control measures, and strategic asset allocation to enhance the company's operating ROA in the future.
Peer comparison
Dec 31, 2024