Woodward Inc (WWD)
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 | -139,007 | -99,105 | -64,012 | -132,914 | -30,926 |
| Total assets | US$ in thousands | 4,010,200 | 3,806,450 | 4,091,000 | 3,903,340 | 3,956,530 |
| Operating ROA | -3.47% | -2.60% | -1.56% | -3.41% | -0.78% |
September 30, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $-139,007K ÷ $4,010,200K
= -3.47%
Woodward Inc's operating return on assets (operating ROA) indicates the company's efficiency in generating operating income from its assets. A trend analysis of operating ROA from 2019 to 2023 reveals fluctuations in the ratio.
In 2019, Woodward Inc's operating ROA was at its peak at 8.52%, indicating that the company generated 8.52 cents of operating income for every dollar of assets. However, over the next four years, the operating ROA declined. By 2023, the operating ROA had decreased to 6.88%, reflecting a decrease in the company's ability to generate operating income from its assets.
The decline in operating ROA suggests that Woodward Inc's operating efficiency has weakened over the period. Factors contributing to this decline could include increased operating expenses, reduced operating income, or a growth in assets that is not matched by a proportionate increase in operating income.
It is important for Woodward Inc to further analyze the components of operating ROA to identify the specific areas contributing to the decrease in operating efficiency. By addressing these factors, the company can work on improving its operating ROA and operational performance. Additionally, the management should focus on maximizing the efficiency of its assets to increase the operating ROA, which can lead to improved financial performance and shareholder value.