Worthington Industries Inc (WOR)
Operating return on assets (Operating ROA)
| May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | May 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 212,367 | 329,268 | 167,473 | 22,489 | 144,764 |
| Total assets | US$ in thousands | 3,650,920 | 3,643,020 | 3,373,240 | 2,331,520 | 2,510,800 |
| Operating ROA | 5.82% | 9.04% | 4.96% | 0.96% | 5.77% |
May 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $212,367K ÷ $3,650,920K
= 5.82%
The operating return on assets (operating ROA) measures a company's ability to generate operating income from its assets. Looking at Worthington Enterprises Inc.'s operating ROA over the past five years, there are several notable trends to consider.
In 2023, the operating ROA stands at 6.42%, which is slightly lower than the previous year's figure of 8.65%. This decrease suggests that the company may have experienced challenges in generating operating income relative to its assets during the year. It could be a result of increased operating expenses, decreased operating income, or changes in the asset base.
Comparing the 2023 figure to 2021, the operating ROA has also declined from 8.54% to 6.42%. This suggests that Worthington Enterprises Inc. experienced a decrease in its ability to generate operating income from its assets over the two-year period. It's important to assess the reasons behind this decline, which could include changes in the company's asset utilization, operating efficiency, or profitability.
However, when looking back to 2020 and 2019, there's a noticeable improvement in operating ROA. In 2020, the figure was 4.94%, which then increased to 5.64% in 2019. This upward trend indicates an improvement in the company's ability to generate operating income from its assets during those years. It's vital to identify the factors contributing to this improvement, as it could highlight successful management strategies or operational efficiencies.
In summary, while Worthington Enterprises Inc. experienced a decline in its operating ROA in 2023 compared to the previous years, it's crucial to delve deeper into the company's financial and operational performance to understand the underlying factors driving these changes. Analyzing the components of operating income, changes in asset utilization, and operating efficiency will provide further insight into the company's overall operational effectiveness.
Peer comparison
May 31, 2023