Alamo Group Inc (ALG)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 25.33% | 26.85% | 24.88% | 25.07% | 25.11% |
| Operating profit margin | 10.12% | 11.72% | 9.82% | 8.76% | 8.01% |
| Pretax margin | 9.19% | 10.36% | 8.87% | 8.21% | 6.72% |
| Net profit margin | 7.12% | 8.06% | 6.73% | 6.01% | 4.97% |
Based on the provided data, we can analyze the profitability ratios of Alamo Group Inc as follows:
1. Gross Profit Margin:
- The gross profit margin has shown a slight decrease from 25.11% in December 2020 to 24.88% in December 2022, followed by an increase to 26.85% in December 2023 and a subsequent decrease to 25.33% in December 2024. Overall, the company has maintained a relatively stable gross profit margin over the years.
2. Operating Profit Margin:
- The operating profit margin has exhibited an upward trend, starting at 8.01% in December 2020 and increasing to 10.12% in December 2024. This indicates that Alamo Group Inc has been able to improve its operational efficiency and control its operating costs effectively over the period.
3. Pre-Tax Margin:
- The pre-tax margin has demonstrated a consistent growth pattern, rising from 6.72% in December 2020 to 9.19% in December 2024. This suggests that the company has been able to manage its expenses and generate higher profits before accounting for taxes.
4. Net Profit Margin:
- The net profit margin has also shown an increasing trend, climbing from 4.97% in December 2020 to 7.12% in December 2024. This indicates that Alamo Group Inc has been successful in effectively managing its overall business operations and generating higher profits for its shareholders after accounting for all expenses.
In conclusion, Alamo Group Inc has been able to enhance its profitability over the years, as evidenced by the improving trends in its operating, pre-tax, and net profit margins. This indicates that the company has been successful in controlling costs, increasing operational efficiency, and generating higher profits relative to its revenue.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 11.36% | 14.05% | 11.36% | 9.70% | 8.40% |
| Return on assets (ROA) | 7.99% | 9.66% | 7.79% | 6.66% | 5.21% |
| Return on total capital | 16.71% | 21.57% | 18.92% | 16.57% | 15.92% |
| Return on equity (ROE) | 11.39% | 14.60% | 12.98% | 11.37% | 9.24% |
Alamo Group Inc has shown a consistent improvement in profitability over the past five years based on the profitability ratios analyzed.
1. Operating Return on Assets (Operating ROA) has steadily increased from 8.40% in 2020 to 14.05% in 2023 and then slightly decreased to 11.36% in 2024. This ratio indicates that the company is effectively generating operating income relative to its total assets.
2. Return on Assets (ROA) has also shown an upward trend, starting at 5.21% in 2020 and reaching 9.66% in 2023 before decreasing to 7.99% in 2024. This ratio reflects the ability of Alamo Group Inc to generate profits from its assets.
3. Return on Total Capital has consistently increased from 15.92% in 2020 to 21.57% in 2023, showcasing the company's efficiency in generating returns from its total capital employed. However, there was a slight decrease to 16.71% in 2024.
4. Return on Equity (ROE) has exhibited a similar pattern of growth, climbing from 9.24% in 2020 to 14.60% in 2023, before declining to 11.39% in 2024. This ratio illustrates the company's ability to generate returns for its shareholders based on the equity invested.
Overall, Alamo Group Inc has shown strong profitability performance over the years, with improvements in key profitability ratios indicating efficient use of assets and capital to generate earnings for its shareholders.