Williams-Sonoma Inc (WSM)
Operating return on assets (Operating ROA)
| Jan 31, 2025 | Jan 31, 2024 | Jan 28, 2024 | Jan 31, 2023 | Jan 29, 2023 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 1,430,180 | 1,244,190 | 1,244,190 | 1,498,420 | 1,498,420 |
| Total assets | US$ in thousands | 5,301,610 | 5,273,550 | 5,273,550 | 4,663,020 | 4,663,020 |
| Operating ROA | 26.98% | 23.59% | 23.59% | 32.13% | 32.13% |
January 31, 2025 calculation
Operating ROA = Operating income ÷ Total assets
= $1,430,180K ÷ $5,301,610K
= 26.98%
To analyze Williams-Sonoma Inc's operating return on assets (operating ROA) based on the provided data:
1. Trend Analysis: The operating ROA has consistently remained at 32.13% for the period ending January 31, 2023, and has then decreased to 23.59% for the period ending January 28, 2024. However, there was a slight improvement to 26.98% for the period ending January 31, 2025.
2. Interpretation: A high operating ROA indicates that Williams-Sonoma Inc is generating substantial operating profits relative to its assets. The initial stability at 32.13% suggests effective asset utilization and profitability management. Despite the decrease to 23.59%, the subsequent increase to 26.98% demonstrates some recovery in operational efficiency.
3. Factors Impacting ROA: Factors such as efficient cost management, revenue generation, inventory control, and asset turnover ratios play a significant role in determining operating ROA. Changes in any of these factors may influence the company's operating ROA performance over time.
4. Comparative Analysis: Comparing Williams-Sonoma Inc's operating ROA with industry peers or historical performance can provide additional insights into its competitive position and operational effectiveness.
5. Monitoring Performance: It is essential for investors and analysts to monitor Williams-Sonoma Inc's operating ROA over time to assess the company's ability to generate profits from its operational activities and efficiently manage its assets.
In conclusion, the fluctuating trend in Williams-Sonoma Inc's operating ROA indicates varying levels of operational efficiency and profitability. Further analysis and monitoring of key performance indicators are necessary to evaluate the company's financial health and competitiveness in the market.