Albemarle Corp (ALB)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 1.16% | 12.33% | 42.00% | 29.99% | 31.80% |
| Operating profit margin | -33.04% | 2.62% | 33.74% | 23.99% | 16.17% |
| Pretax margin | -20.31% | 20.84% | 42.08% | 4.60% | 13.75% |
| Net profit margin | -21.93% | 16.36% | 36.75% | 3.72% | 12.01% |
Albemarle Corp's profitability ratios have exhibited a varying trend over the years. The Gross Profit Margin decreased from 31.80% in December 2020 to 1.16% in December 2024, indicating a decline in the company's ability to generate profits after deducting the cost of goods sold.
The Operating Profit Margin increased from 16.17% in December 2020 to 33.74% in December 2022, representing the efficiency of the company's operations and management in generating profits from sales. However, it sharply declined to -33.04% in December 2024, indicating that the company faced challenges in controlling operational expenses.
The Pretax Margin significantly improved from 13.75% in December 2020 to 42.08% in December 2022, reflecting Albemarle's ability to generate profits before accounting for taxes. However, it decreased to -20.31% in December 2024, suggesting that the company incurred significant expenses that negatively impacted its profitability.
The Net Profit Margin also followed a similar pattern, increasing from 12.01% in December 2020 to 36.75% in December 2022 before declining to -21.93% in December 2024. This ratio indicates the company's profitability after all expenses, including taxes and interest, are deducted.
Overall, the analysis of Albemarle Corp's profitability ratios highlights the fluctuating nature of its profitability over the years, with the company experiencing both positive and negative trends in different periods.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -10.70% | 1.38% | 15.98% | 7.28% | 4.84% |
| Return on assets (ROA) | -7.10% | 8.61% | 17.40% | 1.13% | 3.60% |
| Return on total capital | -13.58% | 1.94% | 22.06% | 10.46% | 7.19% |
| Return on equity (ROE) | -11.84% | 16.72% | 33.70% | 2.20% | 8.80% |
Albemarle Corp's profitability ratios have exhibited varying trends over the years.
1. Operating Return on Assets (Operating ROA):
- Albemarle's Operating ROA increased from 4.84% in 2020 to 15.98% in 2022, indicating improved operational efficiency and management of assets.
- However, there was a significant decline to 1.38% in 2023 and a sharp negative turn to -10.70% in 2024, which may signal operational challenges and potential issues affecting asset utilization.
2. Return on Assets (ROA):
- The ROA for Albemarle dropped from 3.60% in 2020 to 1.13% in 2021, but then surged to 17.40% in 2022, showing a drastic improvement in asset profitability.
- However, the ratio decreased to 8.61% in 2023 and turned negative to -7.10% in 2024, indicating a significant decline in the company's ability to generate profits from its assets.
3. Return on Total Capital:
- Albemarle's Return on Total Capital increased from 7.19% in 2020 to 22.06% in 2022, reflecting a substantial return on all capital invested in the business.
- However, there was a sharp decline to 1.94% in 2023 and a negative turn to -13.58% in 2024, which indicates a decrease in the company's ability to generate returns on its total capital, possibly due to higher capital costs or inefficiencies.
4. Return on Equity (ROE):
- Albemarle's ROE decreased from 8.80% in 2020 to 2.20% in 2021, but then significantly rose to 33.70% in 2022, depicting strong returns to shareholders.
- However, the ROE declined to 16.72% in 2023 and turned negative to -11.84% in 2024, suggesting a decrease in the company's ability to generate returns for its equity holders, potentially raising concerns about profitability and shareholder value.
In conclusion, while Albemarle Corp exhibited improvements in profitability ratios in certain years, there were notable declines and negative turns in others, indicating fluctuations in operational performance, asset utilization, and capital efficiency. Further analysis and investigation into the underlying factors driving these fluctuations would be essential to assess the company's overall financial health and sustainability.