Walgreens Boots Alliance Inc (WBA)
Return on assets (ROA)
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | ||
|---|---|---|---|---|---|---|
| Net income | US$ in thousands | -3,080,000 | 4,337,000 | 2,542,000 | 456,000 | 3,982,000 |
| Total assets | US$ in thousands | 96,628,000 | 90,124,000 | 81,285,000 | 87,174,000 | 67,598,000 |
| ROA | -3.19% | 4.81% | 3.13% | 0.52% | 5.89% |
August 31, 2023 calculation
ROA = Net income ÷ Total assets
= $-3,080,000K ÷ $96,628,000K
= -3.19%
The return on assets (ROA) is a crucial financial ratio that measures a company's ability to generate profits from its assets. Let's analyze Walgreens Boots Alliance Inc's ROA based on the provided data.
In 2023, the ROA of Walgreens Boots Alliance Inc was -3.19%. This negative ROA indicates that the company's net income was insufficient to cover its assets, which could be concerning for investors and stakeholders. Comparing this to previous years, there has been a significant decline from the 4.81% ROA in 2022, suggesting a notable decrease in the company's profitability relative to its asset base.
Looking at the trend over the past five years, we observe fluctuations in the ROA. In 2021, the ROA was 3.13%, indicating a reasonable return on assets. However, in 2020, the ROA dropped to 0.52%, signifying a decline in profitability relative to assets. The highest ROA of 5.89% was recorded in 2019, indicating strong profitability compared to the company's asset base.
The negative ROA in 2023 implies that Walgreens Boots Alliance Inc faced challenges in generating profits from its assets during that period. This may be a result of declining net income or a significant increase in total assets, or a combination of both. Further investigation into the company's financial performance and asset management strategies would be necessary to understand the reasons behind the negative ROA in 2023.
In conclusion, based on the ROA trend, it is evident that Walgreens Boots Alliance Inc experienced fluctuations in its ability to generate profits from its assets over the past five years. The negative ROA in 2023 raises concerns about the company's asset utilization and profitability, indicating the need for a closer examination of its financial performance and asset management practices.
Peer comparison
Aug 31, 2023