Albemarle Corp (ALB)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 12.33% | 42.00% | 29.99% | 31.80% | 35.04% |
| Operating profit margin | 2.62% | 33.74% | 23.99% | 16.17% | 18.56% |
| Pretax margin | 20.84% | 42.08% | 4.60% | 13.75% | 17.31% |
| Net profit margin | 16.36% | 36.75% | 3.72% | 12.01% | 14.86% |
Albemarle Corp.'s profitability ratios have fluctuated significantly over the past five years. The gross profit margin has shown an overall decreasing trend, dropping from 35.04% in 2019 to 12.33% in 2023. This indicates a decline in the company's ability to generate profits after accounting for the cost of goods sold.
The operating profit margin has also experienced substantial variability, ranging from a high of 33.86% in 2022 to a low of 1.88% in 2023. This inconsistency suggests fluctuations in operating efficiency and cost management.
The pretax margin reached a peak of 43.79% in 2022 but then fell to 21.84% in 2023. This ratio reflects the company's ability to generate profits before accounting for taxes, showing both significant growth potential and vulnerability to external factors.
Lastly, the net profit margin, which measures the company's bottom-line profitability after all expenses have been deducted, demonstrates the most stability among the profitability ratios, albeit with fluctuations. The net profit margin ranged from 3.72% in 2021 to 36.75% in 2022, before settling at 16.36% in 2023.
Overall, Albemarle Corp.'s profitability ratios reveal a mixed performance in recent years, with fluctuations indicating potential challenges in cost management, operating efficiency, and overall profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.38% | 15.98% | 7.28% | 4.84% | 6.76% |
| Return on assets (ROA) | 8.61% | 17.40% | 1.13% | 3.60% | 5.41% |
| Return on total capital | 1.94% | 22.06% | 10.46% | 7.19% | 9.80% |
| Return on equity (ROE) | 16.72% | 33.70% | 2.20% | 8.80% | 13.56% |
Albemarle Corp.'s profitability ratios show varying performance over the past five years. The Operating Return on Assets (Operating ROA) saw a significant decline from 16.04% in 2022 to 0.99% in 2023, indicating a decrease in the company's operating efficiency in generating profits from its assets.
The Return on Assets (ROA) also fluctuated, with the highest ratio of 17.40% in 2022 and the lowest of 1.13% in 2021. This suggests that Albemarle's ability to generate profits from its total assets has been inconsistent over the years.
On the other hand, the Return on Total Capital and Return on Equity (ROE) ratios show a similar trend of fluctuation. The Return on Total Capital peaked at 29.03% in 2022 and fell to 14.98% in 2023, while the ROE reached its highest level of 33.70% in 2022 and dropped to 16.72% in 2023. This indicates that the company's efficiency in generating returns for both total capital and equity holders has been volatile.
In conclusion, Albemarle Corp. has experienced fluctuations in its profitability ratios over the past five years, suggesting potential challenges in maintaining consistent performance in generating returns for shareholders and effectively utilizing its assets and capital.