Solventum Corp. (SOLV)
Return on assets (ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|
| Net income | US$ in thousands | 692,000 | 1,343,000 | 1,460,000 | 1,138,000 |
| Total assets | US$ in thousands | 14,377,000 | 13,594,000 | 14,075,000 | — |
| ROA | 4.81% | 9.88% | 10.37% | — |
December 31, 2023 calculation
ROA = Net income ÷ Total assets
= $692,000K ÷ $14,377,000K
= 4.81%
Based on the data provided, Solventum Corp.'s return on assets (ROA) has shown a downward trend over the past three years. In 2021, the ROA was 10.37%, indicating that the company generated $10.37 in profit for every $100 of assets it possessed. However, by the end of 2023, the ROA had decreased to 4.81%, signaling a decline in the company's profitability relative to its asset base.
This decline in ROA could be attributed to various factors such as inefficient asset utilization, increasing expenses, or declining revenues. A lower ROA suggests that Solventum Corp. is less efficient in generating profits from its assets compared to previous years.
It is important for Solventum Corp. to investigate the reasons behind the decreasing ROA and take necessary measures to improve asset efficiency and overall profitability in order to enhance shareholder value and ensure long-term sustainability.
Peer comparison
Dec 31, 2023