Solventum Corp. (SOLV)
Operating return on assets (Operating ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,480,000 | 1,693,000 | 1,879,000 | 1,430,000 |
| Total assets | US$ in thousands | 14,377,000 | 13,594,000 | 14,075,000 | — |
| Operating ROA | 10.29% | 12.45% | 13.35% | — |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $1,480,000K ÷ $14,377,000K
= 10.29%
Solventum Corp.'s operating return on assets (operating ROA) has shown a declining trend over the past three years. Specifically, the operating ROA decreased from 13.35% in 2021 to 12.45% in 2022, and further dropped to 10.29% in 2023. This decreasing trend indicates a potential deterioration in the company's ability to generate operating profits from its assets.
A declining operating ROA could suggest inefficiencies in the company's operations or management's inability to effectively utilize its assets to generate operating income. It may also point to increased operating costs relative to revenue generated, which can impact profitability.
Further analysis and investigation into the factors contributing to the decline in operating ROA would be necessary to identify the root causes of this trend and implement corrective measures to improve the company's operational efficiency and profitability in the future.
Peer comparison
Dec 31, 2023