The AES Corporation (AES)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 18.85% | 19.77% | 20.19% | 24.33% | 27.88% |
| Operating profit margin | 1.56% | -0.73% | -4.20% | -1.55% | 3.50% |
| Pretax margin | 14.16% | 4.03% | -2.23% | -4.86% | 2.71% |
| Net profit margin | 13.67% | 1.97% | -4.33% | -3.67% | 0.48% |
The Gross Profit Margin for The AES Corporation has been declining steadily from 27.88% in December 2020 to 18.85% in December 2024, indicating a decrease in the company's ability to generate profit from its revenue after accounting for the cost of goods sold.
The Operating Profit Margin shows a fluctuating trend over the same period, starting at 3.50% in December 2020, dipping to -4.20% in December 2022, and recovering to 1.56% in December 2024. These figures imply that the company has had periods of negative operating profitability but managed to return to a positive margin by the end of the period.
The Pretax Margin reflects an inconsistent performance, with negative margins in 2021 and 2022, followed by a significant improvement to 14.16% in December 2024. This improvement suggests that the company was able to control its pre-tax expenses more effectively and generate higher pre-tax profits in the most recent year.
The Net Profit Margin for The AES Corporation also experienced fluctuations, starting at 0.48% in December 2020, dropping to -4.33% in December 2022, and eventually rising to 13.67% in December 2024. This variable performance indicates the company's ability to manage its expenses and generate higher net profits in certain periods.
Overall, while the company's profitability ratios have shown volatility and downward trends in some cases, there have been instances of improvement, particularly in the latter years, indicating efforts to enhance operational efficiency and financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.40% | -0.21% | -1.38% | -0.52% | 0.98% |
| Return on assets (ROA) | 3.54% | 0.56% | -1.42% | -1.24% | 0.13% |
| Return on total capital | 88.45% | 73.51% | 34.30% | 13.19% | 49.35% |
| Return on equity (ROE) | 46.08% | 10.01% | -22.40% | -14.62% | 1.75% |
The profitability ratios of The AES Corporation show fluctuations in performance over the years.
1. Operating Return on Assets (Operating ROA): The Operating ROA has been largely inconsistent, varying from a positive of 0.98% in 2020 to negative figures in subsequent years, reaching its lowest point at -1.38% in 2022. Although it slightly improved in 2024 to 0.40%, the trend indicates challenges in generating operating income relative to its asset base.
2. Return on Assets (ROA): The ROA also displayed variability, with negative values recorded in 2021 and 2022, before significantly improving to 3.54% in 2024. This metric signifies the company's ability to generate profit from its total assets, depicting a mix of struggles and recovery within the timeframe.
3. Return on Total Capital: The Return on Total Capital experienced significant fluctuations, ranging from 13.19% in 2021 to a high of 88.45% in 2024. This ratio indicates the return the company is earning on all of its invested capital, showing a substantial improvement in 2024 compared to the previous years.
4. Return on Equity (ROE): The ROE mirrors the trends seen in the other ratios, with negative values in 2021 and 2022 followed by a notable increase to 46.08% in 2024. This metric evaluates the return generated on shareholders' equity, signifying a recovery in profitability and creating more value for shareholders in the later years.
In conclusion, The AES Corporation's profitability ratios demonstrate a mix of challenges and improvements over the years, with more recent data suggesting a positive momentum in generating returns on assets, capital, and equity.