Asbury Automotive Group Inc (ABG)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 17.15% | 18.62% | 20.09% | 19.34% | 17.15% |
| Operating profit margin | 4.86% | 7.26% | 8.25% | 8.05% | 5.20% |
| Pretax margin | 3.35% | 5.41% | 8.55% | 7.09% | 4.74% |
| Net profit margin | 2.50% | 4.07% | 6.46% | 5.41% | 3.57% |
Asbury Automotive Group Inc's profitability has shown some fluctuations over the past five years based on key profitability ratios.
- Gross Profit Margin: The gross profit margin, which indicates the percentage of revenue retained after accounting for the cost of goods sold, has demonstrated an increasing trend from 17.15% in 2020 to 20.09% in 2022, before slightly declining to 18.62% in 2023 and reverting back to 17.15% in 2024. This suggests varying levels of efficiency in managing production costs and pricing strategies.
- Operating Profit Margin: The operating profit margin, a measure of operational efficiency, has shown improvement from 5.20% in 2020 to a peak of 8.25% in 2022. However, it decreased to 4.86% in 2024, indicating potential challenges in controlling operating expenses and generating profits from core business activities.
- Pretax Margin: The pretax margin, representing the percentage of revenue that translates into pre-tax profits, has fluctuated over the period. It rose from 4.74% in 2020 to 8.55% in 2022, but then declined to 3.35% in 2024. This indicates the impact of various factors like changes in operating efficiency, interest expenses, and non-operating income on the company's profitability.
- Net Profit Margin: The net profit margin, revealing the percentage of revenue that converts into net income after all expenses, has also shown variability. It increased from 3.57% in 2020 to 6.46% in 2022 but then declined to 2.50% in 2024. This suggests challenges in managing costs, taxes, and other factors affecting bottom-line profitability.
Overall, the fluctuating trends in these profitability ratios indicate that Asbury Automotive Group Inc has experienced some challenges in maintaining consistent profitability over the years, possibly due to factors such as fluctuating costs, pricing pressures, operational inefficiencies, or changes in market conditions. Further analysis and strategic initiatives may be required to enhance overall profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.08% | 10.58% | 15.87% | 9.89% | 10.09% |
| Return on assets (ROA) | 4.16% | 5.93% | 12.43% | 6.65% | 6.92% |
| Return on total capital | 24.11% | 29.56% | 42.96% | 38.03% | 45.28% |
| Return on equity (ROE) | 12.29% | 18.57% | 34.35% | 25.17% | 28.09% |
Asbury Automotive Group Inc's profitability ratios demonstrate fluctuations over the five-year period from 2020 to 2024.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA measures the company's ability to generate operating profits from its assets. Asbury's Operating ROA ranged from 9.89% to 15.87% during this period, with the highest performance recorded in 2022. This indicates that Asbury was able to generate operating profits efficiently relative to its asset base, although there was a slight decline in 2024.
2. Return on Assets (ROA):
- The ROA represents the overall profitability of the company in relation to its total assets. Asbury's ROA varied from 4.16% to 12.43% over the five years, showing fluctuations in how effectively the company was utilizing its assets to generate profits. The peak performance was in 2022, followed by a notable decline in 2023 and 2024.
3. Return on Total Capital:
- This ratio evaluates the company's ability to generate returns from all invested capital. Asbury's Return on Total Capital ranged from 24.11% to 45.28% during the period, with the highest return recorded in 2020. The figures depict fluctuations, possibly indicating changes in the company's operational efficiency and capital structure over time.
4. Return on Equity (ROE):
- The ROE measures the returns earned on shareholders' equity. Asbury's ROE fluctuated from 12.29% to 34.35% over the five years, with the highest return observed in 2022. The declining trend from 2022 to 2024 may signal a decrease in profitability relative to shareholder investments.
Overall, while Asbury Automotive Group Inc's profitability ratios demonstrate varying performance levels over the period, it is essential for investors and stakeholders to closely monitor these metrics to assess the company's financial health and operational efficiency.