ROA % is calculated as Net Income divided by its average Total Assets over a certain period of time. Pekin Life Insurance Co's annualizedNet Income for the quarter that ended in Dec. 2006 was $14.0 Mil.
Pekin Life Insurance Co's average Total Assets over the quarter that ended in Dec. 2006 was $595.7 Mil. Therefore, Pekin Life Insurance Co's annualized ROA % for the quarter that ended in Dec. 2006 was 2.36%.
The historical rank and industry rank for Pekin Life Insurance Co's ROA % or its related term are showing as below:
PKIN's ROA % is not ranked *
in the Insurance industry.
Industry Median: 2.7 * Ranked among companies with meaningful ROA % only.
Pekin Life Insurance Co (OTCPK:PKIN) 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 four times the quarterly (Dec. 2006) net income data. The Revenue data used here is four times the quarterly (Dec. 2006) 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.
* 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 Insurance - Life subindustry, Pekin Life Insurance Co'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.
Pekin Life Insurance Co ROA % vs Insurance Industry
For the Insurance industry and Financial Services sector, Pekin Life Insurance Co's ROA % distribution charts can be found below:
* The bar in red indicates where Pekin Life Insurance Co's ROA % falls into.
* 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 four times the quarterly (Dec. 2006) net income data.
ROA % is displayed in the 30-year financial page.
Pekin Life Insurance Co (PKIN) has a ROA % of 2.36% as of Dec. 2006. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Pekin Life Insurance Co and its competitors.
Is Pekin Life Insurance Co's ROA % too high?
Pekin Life Insurance Co's current ROA % is 2.36%. The Insurance industry median ROA % is 2.70. Pekin Life Insurance Co's value of 2.36% is 12.6% below this industry median. Overall, Pekin Life Insurance Co has a GF Score™ of 34/100, reflecting its overall financial health beyond just this single metric.
How does Pekin Life Insurance Co's ROA % compare to VERY and CIA?
Pekin Life Insurance Co's ROA % of 2.36% can be compared against companies in the Insurance industry. The industry median ROA % is 2.70. Pekin Life Insurance Co's value of 2.36% is 12.6% below this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good ROA % for an Insurance company?
The median ROA % among Insurance companies is 2.70, based on 506 companies in the industry. Companies in the top quartile (top 25%) have a ROA % significantly above this median, while those in the bottom quartile fall well below. However, ROA % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Pekin Life Insurance Co's current ROA % of 2.36% is 12.6% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high ROA % mean?
A high ROA % can signal that a stock is expensive relative to its fundamentals. Return on assets is the ratio of current-period net income to average two-period total assets. View historical data on Pekin Life Insurance Co and its competitors. For the Insurance industry, the median ROA % is 2.70 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Pekin Life Insurance Co's current ROA % is 2.36%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Pekin Life Insurance Co stock overvalued right now?
Pekin Life Insurance Co (PKIN) has a current ROA % of 2.36%. The current ROA % is 2.36% and 12.6% below the Insurance industry median of 2.70. Pekin Life Insurance Co's overall GF Score™ is 34/100. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is ROA % calculated?
ROA % is calculated from a company's financial statements. For Pekin Life Insurance Co (PKIN), the current ROA % is 2.36% as of Dec. 2006. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Pekin Life Insurance Co is an insurance company. It offers life insurance, accident insurance, health insurance, auto insurance, home insurance, and business insurance to individuals and businesses across the country. The company also offers group life, dental, and short-term disability as well as voluntary products. It sells its insurance products through independent agents.
34GF Score
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