UGI Corporation (UGI)
Operating return on assets (Operating ROA)
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | -1,444,000 | 1,666,000 | 2,350,000 | 982,000 | 617,000 |
| Total assets | US$ in thousands | 15,401,000 | 17,575,000 | 16,723,000 | 13,985,000 | 13,347,000 |
| Operating ROA | -9.38% | 9.48% | 14.05% | 7.02% | 4.62% |
September 30, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $-1,444,000K ÷ $15,401,000K
= -9.38%
The operating return on assets (operating ROA) measures how efficiently a company is generating operating income from its assets. UGI Corp.'s operating ROA has fluctuated over the past five years, ranging from 4.39% in 2019 to -4.54% in 2023. The 2023 operating ROA of -4.54% indicates that the company is producing negative operating income in relation to its assets for that period.
The significant drop in operating ROA from 13.86% in 2021 to 7.26% in 2020 and further down to 9.03% in 2022 suggests a decline in the company's ability to generate operating income compared to its assets in the recent years. This downward trend may indicate inefficiencies in the utilization of the company's assets to generate operating earnings.
It is essential for UGI Corp. to assess the reasons behind the declining operating ROA and take corrective measures to improve operating efficiency and profitability in relation to its asset base. Additionally, investors and stakeholders may need to closely monitor the company's future financial reports to evaluate if the declining trend in operating ROA continues or if the company is able to reverse the negative trend.
Peer comparison
Sep 30, 2023