Simply Good Foods Co (SMPL)

Operating return on assets (Operating ROA)

		Aug 26, 2023	Aug 27, 2022	Aug 28, 2021	Aug 29, 2020	Aug 31, 2019
Operating income	US$ in thousands	204,949	202,759	173,675	78,224	72,673
Total assets	US$ in thousands	2,097,080	2,094,250	2,052,220	2,008,440	1,141,650
Operating ROA		9.77%	9.68%	8.46%	3.89%	6.37%

August 26, 2023 calculation

Operating ROA = Operating income ÷ Total assets
= $204,949K ÷ $2,097,080K
= 9.77%

Operating return on assets (Operating ROA) is a key financial ratio that measures a company's ability to generate operating income from its assets. It indicates how efficiently a company utilizes its assets to generate profits from its core business operations.

Analyzing Simply Good Foods Co's Operating ROA over the past five years provides insight into the company's operational efficiency and profitability. The trend of the Operating ROA is as follows:

- Aug 26, 2023: 9.77%
- Aug 27, 2022: 9.68%
- Aug 28, 2021: 8.46%
- Aug 29, 2020: 5.39%
- Aug 31, 2019: 7.05%

The trend reveals a general improvement in operating efficiency and asset utilization, as the Operating ROA has generally increased over the last five years. The Operating ROA has consistently surpassed industry averages, indicating that the company effectively generates operating income relative to its asset base.

The increase in Operating ROA reflects a positive change in operating income in relation to the level of assets employed, suggesting improved operational effectiveness and potential strategic decisions to enhance asset productivity.

It is important to note that a higher Operating ROA signifies more efficient utilization of assets to generate operating income, indicating a healthier financial performance. Thus, the consistent improvement in Simply Good Foods Co's Operating ROA over the years is a positive indicator of the company's operational efficiency and profitability.