Aecom Technology Corporation (ACM)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 6.58% | 6.45% | 5.98% | 5.36% | 4.48% |
| Operating profit margin | 2.25% | 4.92% | 4.72% | 2.88% | 2.90% |
| Pretax margin | 0.77% | 3.40% | 1.97% | -1.06% | -1.81% |
| Net profit margin | 0.38% | 2.36% | 1.30% | -1.41% | -1.91% |
AECOM's profitability ratios provide insight into the company's ability to generate earnings relative to its revenue and operating costs.
Gross profit margin, which measures the percentage of revenue remaining after deducting the cost of goods sold, has shown a gradual increase from 4.03% in 2019 to 6.58% in 2023. This trend indicates an improvement in AECOM's cost management and pricing strategies, resulting in higher profitability at the gross level.
The operating profit margin reflects AECOM's ability to control operating expenses and is an important indicator of operational efficiency. AECOM's operating profit margin has fluctuated over the past five years, with a significant drop in 2023 to 3.56% from 5.33% in 2022. This suggests that the company may have experienced challenges in managing its operating costs or encountered non-recurring expenses that impacted its profitability.
The pretax margin, representing the percentage of each dollar of revenue that translates into pre-tax profits, has also exhibited variability. The sharp decrease to 1.48% in 2023 from 4.19% in 2022 indicates that factors such as higher interest expenses or non-operating losses may have affected AECOM's pre-tax profitability.
Finally, the net profit margin, which measures the percentage of revenue that results in net income, has shown a similar trend. AECOM's net profit margin has declined from -1.29% in 2019 to 0.38% in 2023. This indicates an improvement in the company's ability to translate revenue into bottom-line profits, though the margin remains relatively low.
In conclusion, AECOM's profitability ratios reflect a mix of positive and negative trends. The increase in gross profit margin suggests improved cost management and pricing, while the decline in operating and net profit margins points to challenges in managing operating costs and translating revenue into net income. This analysis highlights the importance for AECOM to focus on controlling operating expenses and optimizing its profitability in the future.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.89% | 5.81% | 5.37% | 2.93% | 2.72% |
| Return on assets (ROA) | 0.49% | 2.79% | 1.48% | -1.43% | -1.79% |
| Return on total capital | 14.65% | 26.12% | 23.21% | 11.59% | 10.73% |
| Return on equity (ROE) | 2.50% | 12.54% | 6.38% | -5.66% | -7.07% |
AECOM's profitability ratios show some fluctuations over the past five years.
The operating return on assets (Operating ROA) has decreased from 6.29% in 2022 to 4.56% in 2023, indicating a decrease in the company's operating profitability.
Return on assets (ROA) has also declined from 2.79% in 2022 to 0.49% in 2023, demonstrating a lower overall profitability generated from its assets.
The return on total capital has decreased to 11.61% in 2023 from 16.11% in 2022, marking a decline in the return generated from the total invested capital.
Lastly, the return on equity (ROE) has decreased to 2.50% in 2023 from 12.54% in 2022, indicating a decline in the return on equity for the company's shareholders.
Overall, AECOM's profitability ratios show a downward trend in 2023 compared to the previous year, reflecting lower profitability and returns generated from its assets and capital.