Ufp Industries Inc (UFPI)
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 | 492,242 | 652,305 | 950,184 | 737,554 | 345,826 |
| Total assets | US$ in thousands | 4,150,940 | 4,017,800 | 3,672,070 | 3,245,270 | 2,404,890 |
| Operating ROA | 11.86% | 16.24% | 25.88% | 22.73% | 14.38% |
December 31, 2024 calculation
Operating ROA = Operating income ÷ Total assets
= $492,242K ÷ $4,150,940K
= 11.86%
Operating return on assets (ROA) is a key financial ratio that indicates how efficiently a company generates profits from its operating assets. The trend analysis of Ufp Industries Inc operating ROA over the years reveals the following insights:
1. In 2020, the company's operating ROA was 14.38%, which increased significantly to 22.73% in 2021. This indicates that the company improved its operational efficiency in utilizing its assets to generate profits.
2. The upward trend continued in 2022, with the operating ROA reaching 25.88%, reflecting a further enhancement in the company's ability to generate earnings from its operating assets.
3. However, there was a slight drop in the operating ROA in 2023 to 16.24%, which may indicate a temporary decrease in operational efficiency or profitability during that year.
4. By the end of 2024, the operating ROA decreased more significantly to 11.86%, suggesting a potential decline in profitability or efficiency in utilizing operating assets.
In conclusion, Ufp Industries Inc has shown a positive trend in its operating ROA from 2020 to 2022, indicating improved operational efficiency and profitability. However, the fluctuations and decline in the subsequent years highlight the importance of monitoring and analyzing financial ratios to assess the company's performance and make strategic decisions.