Allete Inc (ALE)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 52.26% | 62.34% | 70.39% | 66.08% | 87.21% |
| Operating profit margin | 9.62% | 8.54% | 10.66% | 11.82% | 14.49% |
| Pretax margin | 14.63% | 10.07% | 10.03% | 10.44% | 14.43% |
| Net profit margin | 13.15% | 12.05% | 11.92% | 14.15% | 14.96% |
Allete, Inc.'s profitability ratios have shown some fluctuations over the past five years.
The gross profit margin has experienced a gradual decline from 62.01% in 2019 to 49.12% in 2023. This decrease indicates that the company's cost of goods sold has been increasing relative to its sales revenue.
The operating profit margin also followed a downward trend, dropping from 14.49% in 2019 to 9.62% in 2023. This suggests that Allete's operating expenses have been rising faster than its operating income.
Similarly, the pretax margin has shown a mixed trend, with fluctuations between 6.37% in 2022 and 14.42% in 2019. The increase in 2023 to 11.00% could indicate improved pre-tax profitability, although it still remains below the levels seen in 2019.
On the other hand, the net profit margin has varied but generally remained relatively stable over the five-year period, ranging from 11.92% in 2021 to 14.96% in 2019 and recently showing a slight increase to 13.15% in 2023.
In summary, while Allete, Inc. has experienced some fluctuations in profitability ratios over the past five years, it will be crucial for the company to closely monitor and address the factors contributing to the declining trend in gross and operating profit margins to ensure sustainable profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.72% | 1.96% | 2.36% | 2.27% | 3.28% |
| Return on assets (ROA) | 3.71% | 2.77% | 2.63% | 2.72% | 3.39% |
| Return on total capital | 7.93% | 5.38% | 5.07% | 4.83% | 6.71% |
| Return on equity (ROE) | 8.79% | 7.03% | 7.04% | 7.21% | 8.32% |
Allete, Inc.'s profitability ratios indicate the company's ability to generate profits relative to its assets, capital, and equity over the past five years.
1. Operating return on assets (Operating ROA) has shown some fluctuations, increasing from 1.96% in 2022 to 2.72% in 2023. This ratio measures the company's operating income generated from its total assets.
2. Return on assets (ROA) has also varied, peaking at 3.71% in 2023 and dipping to 2.63% in 2021. ROA reflects the company's overall efficiency in generating profits from its total assets.
3. Return on total capital has followed a similar trend, rising to 4.40% in 2023 from 3.31% in 2022. This ratio considers both equity and debt when assessing the company's profitability.
4. Return on equity (ROE) has been relatively stable over the years, ranging from 7.01% to 8.79%. ROE measures the return earned on the shareholders' equity investment in the company.
Overall, Allete, Inc. has demonstrated a decent performance in terms of profitability, with varying levels of returns across different ratios. The company's ability to efficiently utilize its assets, capital, and equity to generate profits has shown improvement in recent years, reflected in the increasing trend of some profitability ratios.