Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Selected Financial Data since 2015
- Net Profit Margin since 2015
- Total Asset Turnover since 2015
- Price to Sales (P/S) since 2015
- Analysis of Revenues
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Profitability Ratios (Summary)
SolarEdge Technologies Inc., profitability ratios (quarterly data)
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The financial indicators over the analyzed periods demonstrate varying trends across profitability and efficiency metrics.
- Gross Profit Margin
- This margin showed relative stability with slight fluctuations, starting at 32.6% and peaking near 33.64% around early 2020. Post that peak, a gradual decline is observable, reaching a low of approximately 26.85% in late 2022. This indicates a diminishing ability to retain profit from revenues after accounting for the cost of goods sold.
- Operating Profit Margin
- The operating margin followed a similar trajectory, initially increasing to about 14.49% in the first quarter of 2020, suggesting heightened operational efficiency or reduced operating expenses relative to revenue. Subsequently, a consistent downturn ensued, leading to a margin as low as 5.34% by the end of 2022, implying increased operational costs or reduced operational income.
- Net Profit Margin
- The net profit margin exhibited a fluctuating but overall declining pattern. Initial values around 11.22% dipped to as low as 8.39% towards late 2019, with slight recoveries post-2020, but ultimately trending down to near 3.02% by the end of 2022. This decline indicates pressures on the company's bottom line, possibly from increased expenses or other comprehensive costs impacting net earnings.
- Return on Equity (ROE)
- ROE displayed considerable variability, reaching a high of 19.6% in early 2020, signaling strong profitability relative to shareholder equity. However, after this peak, a steady decline occurred, dropping to around 4.31% in late 2022. The downward trend suggests diminishing efficiency in generating profits from equity investment.
- Return on Assets (ROA)
- ROA mirrored the patterns seen in ROE, rising to a peak of 11.22% in early 2020 before gradually decreasing to 2.2% by the end of 2022. This decline reflects a reduced capacity to generate net income from total asset investments, which may be indicative of asset underutilization or decreasing operational profitability.
Overall, the company experienced a period of improvement in several key financial ratios through early 2020, followed by a protracted decline in profitability and efficiency metrics. This could be attributed to increasing costs, market challenges, or other operational pressures impacting margins and returns toward the latter periods.
Return on Sales
Return on Investment
Gross Profit Margin
SolarEdge Technologies Inc., gross profit margin calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Gross profit | |||||||||||||||||||||
| Revenues | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| Gross profit margin1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Gross Profit Margin, Competitors2 | |||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q4 2022 Calculation
Gross profit margin = 100
× (Gross profitQ4 2022
+ Gross profitQ3 2022
+ Gross profitQ2 2022
+ Gross profitQ1 2022)
÷ (RevenuesQ4 2022
+ RevenuesQ3 2022
+ RevenuesQ2 2022
+ RevenuesQ1 2022)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The quarterly financial data reveals several key trends in the company's revenue, gross profit, and gross profit margin over the analyzed periods.
- Revenue Trends
- Revenues generally demonstrate a consistent upward trajectory throughout the entire timeframe. Starting from approximately $271.9 million in the first quarter of 2019, revenue experiences noticeable growth, reaching around $890.7 million by the last quarter of 2022. Despite some fluctuations, the overall pattern is an increase in revenue, with particularly strong growth observed from early 2021 onward.
- Gross Profit Trends
- Gross profit figures mirror the revenue growth trend, increasing from about $86.1 million in the first quarter of 2019 to approximately $261 million by the end of 2022. There is some variability within quarters, including a dip around mid-2020. However, the gross profit recovers and surpasses previous highs in the subsequent quarters, reflecting strong operational performance in recent periods.
- Gross Profit Margin Trends
- The gross profit margin displays a decreasing trend over the period examined. Initially, margins range around 32.6% early in 2019, reaching peak levels slightly above 33% in the first half of 2020. From 2021 onwards, margins begin to decline steadily, falling to approximately 27% by the end of 2022. This decline indicates that while revenues and gross profits have increased, the relative profitability per dollar of revenue has decreased over time.
Overall, the data suggest that the company has succeeded in significantly expanding its sales volume and gross profit dollars. However, the falling gross profit margin signals increased cost pressure or pricing challenges, which may warrant further investigation. The combination of growing revenues and declining margins highlights a shift in the company’s cost structure or competitive environment during the latter part of the period analyzed.
Operating Profit Margin
SolarEdge Technologies Inc., operating profit margin calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Operating income | |||||||||||||||||||||
| Revenues | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| Operating profit margin1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Operating Profit Margin, Competitors2 | |||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q4 2022 Calculation
Operating profit margin = 100
× (Operating incomeQ4 2022
+ Operating incomeQ3 2022
+ Operating incomeQ2 2022
+ Operating incomeQ1 2022)
÷ (RevenuesQ4 2022
+ RevenuesQ3 2022
+ RevenuesQ2 2022
+ RevenuesQ1 2022)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial performance over the analyzed quarters exhibits noteworthy trends in operating income, revenues, and operating profit margin.
- Operating Income
- The operating income showed significant fluctuations throughout the periods. Starting at approximately $28 million in early 2019, it reached a peak of over $66 million in the third quarter of 2019. However, a decline followed, with a notable drop to around $14 million by the end of 2020. The income rebounded modestly during 2021 with values mostly above $40 million, peaking again near $84 million in the third quarter of 2022. A substantial negative value was observed in the last quarter of 2022, indicating a loss of over $5 million in operating income.
- Revenues
- The revenue figures demonstrate a consistent upward trajectory throughout the analyzed periods. Starting from approximately $272 million in the first quarter of 2019, revenues steadily increased each quarter, reaching close to $891 million by the last quarter of 2022. This indicates strong top-line growth over the nearly four-year span.
- Operating Profit Margin
- The operating profit margin showed some variability but followed a general declining trend in recent periods despite revenue growth. Beginning around 13% in 2019, the margin peaked at approximately 14.5% in the first quarter of 2020. Thereafter, it gradually decreased to below 6% by the end of 2022. This decline suggests that the company’s profitability relative to revenues weakened, highlighting potential increases in operating costs or other expenses affecting margins.
Overall, the data indicates robust revenue growth accompanied by volatile operating income and a diminishing operating profit margin towards the end of the period under review. This combination of trends highlights potential pressures on profitability despite expanding sales.
Net Profit Margin
SolarEdge Technologies Inc., net profit margin calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net income attributable to SolarEdge Technologies, Inc. | |||||||||||||||||||||
| Revenues | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| Net profit margin1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Net Profit Margin, Competitors2 | |||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q4 2022 Calculation
Net profit margin = 100
× (Net income attributable to SolarEdge Technologies, Inc.Q4 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q3 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q2 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q1 2022)
÷ (RevenuesQ4 2022
+ RevenuesQ3 2022
+ RevenuesQ2 2022
+ RevenuesQ1 2022)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Revenue Trends
- Revenues show a general upward trend over the analyzed periods, increasing from approximately 271.9 million USD in the first quarter of 2019 to around 890.7 million USD in the last quarter of 2022. There is a noticeable acceleration in revenue growth beginning around early 2021, with revenues approximately doubling from Q1 2019 to Q4 2022. Although some quarters in 2020 display a slight fluctuation or deceleration, the overall trajectory remains strongly positive.
- Net Income Trends
- Net income attributable to the company fluctuates significantly across the quarters. Starting at about 19.0 million USD in Q1 2019, net income rose to a peak of roughly 52.8 million USD in Q4 2019 before experiencing a decline and volatility thereafter. In 2020, net income fluctuated, falling to around 17.7 million USD in Q4 2020. In 2021, net income recovered somewhat and peaked again in Q4 at approximately 53.0 million USD. However, in 2022, net income showed a declining trend, dropping from 40.9 million USD in Q1 to around 20.8 million USD in Q4, indicating pressure on profitability during that year.
- Net Profit Margin Analysis
- The net profit margin percentage exhibits a downward trend over the four-year span. Initially, margins ranged between about 8.4% and 11.6% through 2019 and 2020, showing relatively strong profitability. Starting in 2021, the margin began a gradual decline from roughly 8.9% in Q1 2021 down to approximately 3.0% by Q4 2022. This diminishing margin trend suggests increasing costs, pricing pressure, or other factors negatively affecting net profitability despite rising revenues.
- Overall Insights
- The company demonstrated solid revenue growth through the analyzed period, particularly after 2020. However, net income and profit margins did not consistently mirror this growth and experienced notable fluctuations with a clear downward pattern in profitability ratios. The divergence between rising revenues and shrinking profit margins in the most recent quarters suggests challenges such as increased cost of goods sold, operational expenses, or competitive pressures impacting efficiency and earnings quality.
Return on Equity (ROE)
SolarEdge Technologies Inc., ROE calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net income attributable to SolarEdge Technologies, Inc. | |||||||||||||||||||||
| Total SolarEdge Technologies, Inc. stockholders’ equity | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| ROE1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| ROE, Competitors2 | |||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q4 2022 Calculation
ROE = 100
× (Net income attributable to SolarEdge Technologies, Inc.Q4 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q3 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q2 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q1 2022)
÷ Total SolarEdge Technologies, Inc. stockholders’ equity
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends in profitability, equity growth, and return on equity (ROE) over the observed periods.
- Net Income
- The net income attributable fluctuates over the quarters, peaking notably in the fourth quarter of 2019 and maintaining strong levels through 2021. However, starting in early 2022, a clear declining trend is visible, with net income falling to its lowest points since 2019 by the end of 2022. This suggests increasing challenges affecting profitability or possibly increased costs or market pressures during that latter period.
- Stockholders’ Equity
- Total stockholders’ equity shows a consistent and significant upward trend across all periods. Beginning at approximately $626 million in early 2019, equity more than triples to over $2.17 billion by the end of 2022. This steady growth indicates ongoing capital accumulation, retained earnings, or possibly new equity investments, reflecting overall strengthening of the financial base.
- Return on Equity (ROE)
- ROE demonstrates a declining pattern throughout the timeline, starting near 18% in early 2019 and decreasing steadily to just over 4% by the end of 2022. Despite growing equity bases and fluctuating net income, the diminishing ROE signifies reduced efficiency in generating profits from the equity capital available. This might be due to lower net income growth relative to equity expansion or other operational factors impacting profitability ratios.
In summary, while the company has substantially increased its equity base over the reported quarters, net income has experienced volatility and recently declined. Concurrently, the declining ROE trend suggests a decreasing return generated on shareholders' equity, highlighting potential areas for management attention regarding operational efficiency and profitability enhancement.
Return on Assets (ROA)
SolarEdge Technologies Inc., ROA calculation (quarterly data)
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net income attributable to SolarEdge Technologies, Inc. | |||||||||||||||||||||
| Total assets | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| ROA1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| ROA, Competitors2 | |||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q4 2022 Calculation
ROA = 100
× (Net income attributable to SolarEdge Technologies, Inc.Q4 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q3 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q2 2022
+ Net income attributable to SolarEdge Technologies, Inc.Q1 2022)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals distinct trends and fluctuations in profitability, asset growth, and return on assets (ROA) over the analyzed quarters.
- Net Income
- Net income attributable to the company demonstrates variability across the periods. Initially, there was a substantial increase from approximately $19 million in the first quarter of 2019 to a peak of about $52.8 million by the end of 2019. This gain was followed by a notable decline during 2020, with net income dropping to around $17.7 million by year-end. In 2021, net income recovered significantly, reaching over $53 million in the fourth quarter. However, in 2022, the trend reversed again, showing a decreasing pattern with values dropping to approximately $20.8 million by the last quarter.
- Total Assets
- Total assets steadily increased throughout the entire period under review. Starting at roughly $1.18 billion in early 2019, assets nearly doubled by the end of 2022, reaching approximately $4.27 billion. The growth accelerated noticeably from 2020 onwards, indicating substantial asset expansion during this timeframe.
- Return on Assets (ROA)
- The ROA metric exhibited a declining trend overall. In the first half of 2019, ROA was relatively robust, around 9-10%, peaking at nearly 11.2% in the first quarter of 2020. Following this peak, ROA consistently decreased, dropping below 6% throughout 2021 and further declining in 2022 to as low as 2.2% by the end of the year. This diminishing efficiency suggests that while assets grew significantly, the net income generated from those assets did not increase proportionally.
In summary, the company experienced strong net income growth and high returns on assets in early periods, but these profitability measures weakened in recent years despite considerable asset growth. The decline in ROA highlights a potential concern regarding the efficient utilization of the expanding asset base to generate profits.