Sonoco Products Company (SON)
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 | 326,578 | 715,790 | 675,396 | -64,686 | 487,758 |
| Total assets | US$ in thousands | 12,507,800 | 7,191,960 | 7,089,910 | 5,085,330 | 5,277,260 |
| Operating ROA | 2.61% | 9.95% | 9.53% | -1.27% | 9.24% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $326,578K ÷ $12,507,800K
= 2.61%
Operating Return on Assets (Operating ROA) is a key financial ratio that measures a company's efficiency in generating profits from its assets used in operations. Analyzing the historical trend of Sonoco Products Company's Operating ROA from 2020 to 2024 provides valuable insights into its operational performance.
In December 2020, Sonoco Products Company had an Operating ROA of 9.24%, indicating that the company generated a respectable return on its assets in that period. However, in December 2021, the Operating ROA significantly declined to -1.27%, suggesting that the company's profitability from its operational assets turned negative, which could be a concerning sign.
The following years showed a positive trend in Operating ROA for Sonoco Products Company. In December 2022, the Operating ROA increased to 9.53%, indicating a strong recovery in profitability from operational assets. This positive momentum continued in December 2023, with an Operating ROA of 9.95%, indicating further improvement in profitability and efficiency in asset utilization.
However, in December 2024, the Operating ROA declined to 2.61%, which is lower compared to the previous year but still positive. This decrease might signal a potential slowdown in the company's profitability from its operational assets compared to the prior year.
Overall, the fluctuation in Sonoco Products Company's Operating ROA over the years reflects varying levels of efficiency in utilizing its operational assets to generate profits. It would be crucial for the company to maintain a sustainable and positive trend in Operating ROA to ensure continued profitability and operational effectiveness.
Peer comparison
Dec 31, 2024