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Sears Holdings Corp  (NAS:SHLD) ROA %: -11.53% (As of Jul. 2017)

Return on assets is calculated as Net Income divided by its Total Assets. Sears Holdings Corp's annualized Net Income for the quarter that ended in Jul. 2017 was $-1,004 Mil. Sears Holdings Corp's Total Assets for the quarter that ended in Jul. 2017 was $8,711 Mil. Therefore, Sears Holdings Corp's annualized return on assests (ROA) for the quarter that ended in Jul. 2017 was -11.53%.

NAS:SHLD' s ROA % Range Over the Past 10 Years
Min: -21.46   Max: 2.88
Current: -14.11

-21.46
2.88

During the past 13 years, Sears Holdings Corp's highest Return on Assets (ROA) was 2.88%. The lowest was -21.46%. And the median was -5.92%.

NAS:SHLD's ROA % is ranked lower than
93% of the 947 Companies
in the Global industry.

( Industry Median: 2.82 vs. NAS:SHLD: -14.11 )

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

* Premium members only.

Sears Holdings Corp Annual Data

Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Jan16 Jan17
ROA % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -4.57 -7.26 -10.70 -9.21 -21.46

Sears Holdings Corp Quarterly Data

Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Apr15 Jul15 Oct15 Jan16 Apr16 Jul16 Oct16 Jan17 Apr17 Jul17
ROA % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only -14.50 -27.86 -24.01 10.59 -11.53

Competitive Comparison
* 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.


Calculation

Sears Holdings Corp's annualized Return on Assets (ROA) for the fiscal year that ended in Jan. 2017 is calculated as:

ROA=Net Income (A: Jan. 2017 )/( (Total Assets (A: Jan. 2016 )+Total Assets (A: Jan. 2017 ))/ 2 )
=-2221/( (11337+9362)/ 2 )
=-2221/10349.5
=-21.46 %

Sears Holdings Corp's annualized Return on Assets (ROA) for the quarter that ended in Jul. 2017 is calculated as:

ROA=Net Income (Q: Jul. 2017 )/( (Total Assets (Q: Apr. 2017 )+Total Assets (Q: Jul. 2017 ))/ 2 )
=-1004/( (9071+8351)/ 2 )
=-1004/8711
=-11.53 %

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

In the calculation of annual return on assets, 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 four times the quarterly (Jul. 2017) net income data. Return on Assets is displayed in the 15-year financial page.


Explanation

Return on assets (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. ROAs can vary drastically across industries. Therefore, return on assets 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 bank’s 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:

ROA %(Q: {Q1})
=Net Income/Total Assets
=-1004/8711
=(Net Income / Revenue)*(Revenue / Total Assets)
=(-1004 / 17460)*(17460 / 8711)
=Net Margin %*Asset Turnover
=-5.75 %*2.0044
=-11.53 %

Note: The Net Income data used here is four times the quarterly (Jul. 2017) net income data. The Revenue data used here is four times the quarterly (Jul. 2017) revenue data.

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.


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