Timken Company (TKR)
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 | 611,100 | 657,100 | 606,900 | 513,100 | 454,900 |
| Total assets | US$ in thousands | 6,411,000 | 6,541,700 | 5,772,400 | 5,170,700 | 5,041,600 |
| Operating ROA | 9.53% | 10.04% | 10.51% | 9.92% | 9.02% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $611,100K ÷ $6,411,000K
= 9.53%
Operating return on assets (Operating ROA) is a crucial indicator of Timken Company's operational efficiency in generating profits relative to its assets. The trend analysis of Timken Company's Operating ROA from December 31, 2020, to December 31, 2024, reveals a somewhat fluctuating pattern.
Starting at 9.02% on December 31, 2020, the Operating ROA increased steadily to 9.92% by December 31, 2021, indicating improved profitability generated from its operating activities. Subsequently, by December 31, 2022, the Operating ROA rose further to 10.51%, reflecting an enhanced efficiency in generating profits from its asset base.
However, the trend slightly reversed by December 31, 2023, with the Operating ROA slightly declining to 10.04%. This dip suggests a potential decrease in the company's profitability in relation to its assets. The trend continued in 2024, with the Operating ROA falling to 9.53%, indicating a further reduction in profitability efficiency in that period.
Overall, while Timken Company demonstrated consistent improvement in operational efficiency and profitability in the initial years, the slight decline in the latter years indicates a need for closer monitoring and potential operational optimization to maintain or enhance its profitability relative to its asset base.
Peer comparison
Dec 31, 2024