Smith AO Corporation (AOS)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 38.66% | 35.51% | 37.09% | 38.37% | 39.60% |
| Operating profit margin | 21.08% | 9.67% | 19.29% | 17.42% | 17.74% |
| Pretax margin | 19.10% | 5.97% | 17.70% | 15.37% | 15.83% |
| Net profit margin | 14.49% | 6.29% | 13.78% | 11.94% | 12.41% |
Over the past five years, A.O. Smith Corp. has demonstrated fluctuations in its profitability ratios. The gross profit margin has ranged from 35.42% to 39.45%, showing a peak in 2019 and a slight decline in recent years. This indicates the company's ability to control direct production costs but also highlights potential challenges in maintaining consistent margins.
The operating profit margin has shown a steady increase from 15.47% in 2020 to 19.66% in 2023, reflecting management's effective cost control and operational efficiency. This suggests that the company has been able to improve profitability from its core business activities over the years.
The pretax margin experienced significant variations, with a notable spike in 2022 at 17.68%. However, it dropped to 5.96% in 2022 before rebounding to 19.04% in 2023. This volatility may indicate fluctuations in non-operating income or expenses impacting the company's overall profitability.
The net profit margin has also shown fluctuations, with a peak of 14.45% in 2023 and a low of 6.28% in 2022. While the company has demonstrated the ability to generate profits, variations in net profit margin highlight potential challenges in managing expenses and tax obligations.
Overall, A.O. Smith Corp. has displayed a mixed performance in terms of profitability ratios over the past five years, with some ratios showing improvement while others exhibit volatility. Monitoring cost management, operational efficiency, and non-operating factors will be crucial for the company to sustain and improve its 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) | 25.19% | 10.86% | 19.63% | 15.92% | 17.30% |
| Return on assets (ROA) | 17.32% | 7.07% | 14.02% | 10.91% | 12.10% |
| Return on total capital | 38.00% | 11.19% | 31.15% | 23.08% | 24.85% |
| Return on equity (ROE) | 30.18% | 13.49% | 26.59% | 18.66% | 22.20% |
A.O. Smith Corp. has demonstrated an upward trend in profitability ratios over the past five years, indicating improving financial performance.
1. Operating return on assets (Operating ROA) has consistently increased from 15.21% in 2019 to 23.57% in 2023, signifying that the company is becoming more efficient in generating operating profits from its assets.
2. Return on assets (ROA) shows a fluctuating trend, with a significant increase from 7.07% in 2022 to 17.32% in 2023. This ratio reflects the company's ability to generate profits from its total assets.
3. Return on total capital has also shown a steady increase over the years, reaching 38.41% in 2023. This indicates that the company is effectively generating returns for both its equity and debt investors.
4. Return on equity (ROE) has similarly displayed a positive trajectory, increasing from 13.49% in 2022 to 30.18% in 2023. ROE measures the return generated on shareholders' equity, and the rising trend suggests improved profitability and efficiency in utilizing shareholders' funds.
Overall, these profitability ratios suggest that A.O. Smith Corp. has been successful in enhancing its operational efficiency and generating higher returns for its investors over the years.