Olympic Steel Inc (ZEUS)
Operating return on assets (Operating ROA)
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Operating income | US$ in thousands | 77,671 | 133,747 | 172,466 | 573 | 16,610 |
| Total assets | US$ in thousands | 984,835 | 891,627 | 1,023,570 | 1,023,570 | 649,555 |
| Operating ROA | 7.89% | 15.00% | 16.85% | 0.06% | 2.56% |
December 31, 2023 calculation
Operating ROA = Operating income ÷ Total assets
= $77,671K ÷ $984,835K
= 7.89%
Operating return on assets (operating ROA) is a key financial ratio that measures a company's ability to generate operating income from its assets. The trend analysis of Olympic Steel Inc.'s operating ROA over the past five years reveals fluctuations in the company's operational efficiency and asset utilization.
In 2023, Olympic Steel Inc. reported an operating ROA of 7.89%, down from the previous year's figure of 15.00%. This significant decrease may indicate a decline in the company's operating income generated relative to its total assets. It could suggest challenges in effectively utilizing assets to generate profits or operational inefficiencies impacting the company's financial performance.
The 2022 operating ROA of 15.00% reflected a strong performance compared to the preceding years. This improvement indicates that Olympic Steel Inc. effectively converted its assets into operating income, showcasing better operational efficiency and profitability during that year.
In 2021, the company achieved an operating ROA of 16.85%, which was the highest among the years analyzed. This suggests that Olympic Steel Inc. efficiently utilized its assets to generate operating income, indicating a period of high operational efficiency and profitability.
The negligible operating ROA of 0.09% in 2020 indicates a challenge for Olympic Steel Inc. in generating operating income from its assets during that year. This could be attributed to various factors impacting the company's operational performance or inefficiencies in asset utilization.
In 2019, the operating ROA improved to 2.56%, indicating a slight recovery compared to the previous year. This could signify efforts by Olympic Steel Inc. to enhance its operational efficiency and profitability by better utilizing its assets.
Overall, the fluctuation in Olympic Steel Inc.'s operating ROA over the past five years suggests varying levels of operational efficiency and asset utilization. It is crucial for the company to focus on optimizing its asset management and enhancing operational performance to ensure sustainable profitability and value creation for its stakeholders in the future.
Peer comparison
Dec 31, 2023