Alcoa Corp (AA)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 15.56% | 6.99% | 17.98% | 24.68% | 14.18% |
| Operating profit margin | 12.77% | -5.54% | 5.64% | 9.87% | 1.86% |
| Pretax margin | 2.43% | -5.54% | 5.64% | 9.87% | 1.86% |
| Net profit margin | 0.50% | -6.17% | -0.99% | 3.53% | -1.83% |
Alcoa Corp's profitability ratios have shown fluctuating trends over the past five years. The gross profit margin, a measure of profitability after accounting for the cost of goods sold, increased from 14.18% in 2020 to 24.68% in 2021, indicating improved efficiency in production. However, the margin declined to 17.98% in 2022 and further decreased to 6.99% in 2023 before recovering slightly to 15.56% in 2024.
The operating profit margin, which reflects profit after operating expenses, was 1.86% in 2020 but showed significant improvement to 9.87% in 2021. The margin decreased to 5.64% in 2022, turned negative at -5.54% in 2023, and then rebounded to 12.77% in 2024, indicating fluctuations in operational efficiency and cost management.
The pretax margin, representing profitability before taxes, followed a similar pattern to the operating profit margin, with improvements from 1.86% in 2020 to 9.87% in 2021 before declining to 5.64% in 2022 and turning negative at -5.54% in 2023. In 2024, the margin slightly recovered to 2.43%.
The net profit margin, which shows the amount of each dollar of revenue retained as profit, was negative at -1.83% in 2020 but turned positive at 3.53% in 2021. However, the margin decreased to -0.99% in 2022, further declined to -6.17% in 2023, and improved slightly to 0.50% in 2024, indicating challenges in generating bottom-line profits.
Overall, Alcoa Corp's profitability ratios reflect a mix of positive and negative trends, highlighting the company's varying success in managing costs, generating revenues, and controlling expenses over the analyzed period.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.80% | -4.13% | 4.76% | 7.98% | 1.16% |
| Return on assets (ROA) | 0.43% | -4.60% | -0.83% | 2.86% | -1.14% |
| Return on total capital | 17.00% | -13.74% | 13.83% | 25.66% | 5.23% |
| Return on equity (ROE) | 1.16% | -15.31% | -2.42% | 9.18% | -5.13% |
Based on the data provided, the profitability ratios of Alcoa Corp have shown variability over the years:
1. Operating Return on Assets (Operating ROA):
- Alcoa Corp's Operating ROA increased significantly from 1.16% in December 2020 to 10.80% in December 2024. This indicates an improvement in the company's ability to generate operating profits from its assets.
2. Return on Assets (ROA):
- The ROA fluctuated over the years, ranging from -1.14% in December 2020 to 2.86% in December 2021, and then dropping to 0.43% by December 2024. The positive values suggest profitability relative to total assets, with a notable dip in 2023.
3. Return on Total Capital:
- Alcoa Corp's Return on Total Capital exhibited significant volatility, with a high of 25.66% in December 2021 and a low of -13.74% in December 2023. The ratio improved to 17.00% by December 2024, indicating the company's ability to generate returns from both equity and debt capital.
4. Return on Equity (ROE):
- The Return on Equity also varied, with a low of -5.13% in December 2020, a peak of 9.18% in December 2021, and a subsequent decline to 1.16% by December 2024. The negative values in some years suggest a challenge in generating returns for shareholders.
Overall, Alcoa Corp's profitability ratios demonstrate fluctuation over the years, with improvements in certain ratios like Operating ROA and Return on Total Capital, but with inconsistencies in ROA and ROE performance. Analyzing these ratios can provide insights into the company's efficiency in generating profits from its assets, total capital, and equity for its shareholders.