STERIS plc (STE)

Operating return on assets (Operating ROA)

		Mar 31, 2024	Mar 31, 2023	Mar 31, 2022	Mar 31, 2021	Mar 31, 2020
Operating income	US$ in thousands	836,118	791,101	425,618	548,368	537,046
Total assets	US$ in thousands	11,063,700	10,821,800	11,423,600	6,574,470	5,440,870
Operating ROA		7.56%	7.31%	3.73%	8.34%	9.87%

March 31, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $836,118K ÷ $11,063,700K
= 7.56%

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

Analyzing the operating ROA trend for STERIS plc over the past five years, we observe a fluctuating pattern. Initially, in March 2020, the operating ROA stood at 9.87%, reflecting a strong performance in efficiently converting assets into operating income. However, this figure declined in the subsequent years, reaching its lowest point in March 2022 at 3.73%.

The company showed some improvement in March 2023 with an operating ROA of 7.31%, indicating a rebound in asset efficiency. In the latest period ending March 2024, the operating ROA further increased to 7.56%, suggesting continued progress in leveraging assets to generate operating profits.

Overall, the fluctuation in STERIS plc's operating ROA over the years indicates varying levels of asset efficiency and operating income generation. It is essential for stakeholders to closely monitor this ratio to ensure the company is effectively utilizing its assets to drive profitability and sustainable growth in the future.