ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Associated British Foods's annualizedNet Income for the quarter that ended in Feb. 2024 was £1,326 Mil.
Associated British Foods's average Total Assets over the quarter that ended in Feb. 2024 was £18,793 Mil. Therefore, Associated British Foods's annualized ROA % for the quarter that ended in Feb. 2024 was 7.08%.
The historical rank and industry rank for Associated British Foods's ROA % or its related term are showing as below:
LSE:ABF'
s ROA % Range Over the Past 10 Years
Min: 2.85 Med: 5.91 Max: 9.91
Current: 5.42
During the past 13 years, Associated British Foods's highest ROA % was 9.91%. The lowest was 2.85%. And the median was 5.91%.
LSE:ABF's ROA % is ranked better than 65.34% of 1904
companies
in the Consumer Packaged Goods industry
Industry Median: 2.96
vs LSE:ABF: 5.42
Associated British Foods ROA % Historical Data
The historical data trend for Associated British Foods's ROA % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Packaged Foods subindustry, Associated British Foods's ROA %, along with its competitors' market caps and ROA % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Associated British Foods ROA % Distribution
For the Consumer Packaged Goods industry and Consumer Defensive sector, Associated British Foods's ROA % distribution charts can be found below:
* The bar in red indicates where Associated British Foods's ROA % falls into.
Associated British Foods ROA % Calculation
Associated British Foods's annualized ROA % for the fiscal year that ended in Aug. 2023 is calculated as:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of annual ROA %, the net income of the last fiscal year and the average total assets over the fiscal year are used. In calculating the quarterly data,
the Net Income data used here is two times the semi-annual (Feb. 2024) net income data.
ROA % is displayed in the 30-year financial page.
Associated British Foods (LSE:ABF) ROA % Explanation
ROA % measures the rate of return on the total assets (shareholder equity plus liabilities). It measures a firm's efficiency at generating profits from shareholders' equity plus its liabilities. ROA % shows how well a company uses what it has to generate earnings. ROA %s can vary drastically across industries. Therefore, ROA % should not be used to compare companies in different industries. For retailers, a ROA % of higher than 5% is expected. For example, Wal-Mart (WMT) has a ROA % of about 8% as of 2012. For banks, ROA % is close to their interest spread. A banks ROA % is typically well under 2%.
Similar to ROE, ROA % is affected by profit margins and asset turnover. This can be seen from the Du Pont Formula:
Note:
The Net Income data used here is two times the semi-annual (Feb. 2024) net income data. The Revenue data used here is two times the semi-annual (Feb. 2024) revenue data.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Be Aware
Like ROE, ROA % is calculated with only 12 months data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective. ROA % can be affected by events such as stock buyback or issuance, and by goodwill, a company's tax rate and its interest payment. ROA % may not reflect the true earning power of the assets. A more accurate measurement is ROC % (ROC).
Many analysts argue the higher return the better. Buffett states that really high ROA % may indicate vulnerability in the durability of the competitive advantage.
E.g. Raising $43b to take on KO is impossible, but $1.7b to take on Moody's is. Although Moody's ROA % and underlying economics is far superior to Coca Cola, the durability is far weaker because of lower entry cost.
Associated British Foods ROA % Related Terms
Thank you for viewing the detailed overview of Associated British Foods's ROA % provided by GuruFocus.com. Please click on the following links to see related term pages.
Associated British Foods (LSE:ABF) Business Description
Associated British Foods is a diversified international retail, food, and ingredients group with 130,000 employees and operations in 50 countries across Europe, southern Africa, the Americas, Asia, and Australia. The group sells branded grocery products, grows and processes sugar, supplies farmers with crop input and animal feed, and runs the popular Primark clothing retail chain. It also supplies ingredients like baker's yeast, enzymes, lipids, and cereal specialities. Some 40% of sales are in the U.K., and Primark generates more than half of the firm's operating profit.
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