Alpha and Omega Semiconductor Ltd (AOSL)
Profitability ratios
Return on sales
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 26.16% | 28.86% | 34.54% | 31.14% | 22.10% |
| Operating profit margin | -0.57% | 3.26% | 13.12% | 9.75% | -3.00% |
| Pretax margin | -1.13% | 2.65% | 63.33% | 9.45% | -1.34% |
| Net profit margin | -1.69% | 1.79% | 58.28% | 8.85% | -1.42% |
Alpha and Omega Semiconductor Ltd's profitability ratios indicate fluctuations in the company's profitability over the past five years. The gross profit margin has shown a declining trend from 34.54% in 2022 to 26.16% in 2024, which raises concerns about the company's ability to control its cost of goods sold.
The operating profit margin also displays volatility, with negative margins in 2021 and 2020. This suggests inefficiencies in the company's operating expenses management. Furthermore, the pretax margin experienced a significant decline in 2024 compared to 2022, indicating a potentially unfavorable tax position that impacted earnings.
The net profit margin demonstrates a similar pattern to the pretax margin, showing a notable decrease in 2024 compared to 2022. This suggests that while the company's top-line revenue may be substantial, its bottom-line profitability is being affected by various expenses and inefficiencies.
In summary, Alpha and Omega Semiconductor Ltd's profitability ratios reveal fluctuating profitability levels over the years, indicating potential challenges in managing costs and expenses effectively to enhance overall profitability.
Return on investment
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -0.33% | 1.88% | 7.86% | 6.98% | -1.76% |
| Return on assets (ROA) | -0.97% | 1.03% | 34.90% | 6.33% | -0.83% |
| Return on total capital | -0.41% | 2.44% | 11.38% | 14.20% | -3.54% |
| Return on equity (ROE) | -1.24% | 1.40% | 53.06% | 15.57% | -2.25% |
Based on the profitability ratios of Alpha and Omega Semiconductor Ltd for the years spanning from June 30, 2020, to June 30, 2024, several key insights can be gleaned.
1. Operating Return on Assets (Operating ROA): The operating ROA has shown a trend of fluctuation over the five-year period. It was positive in 2019 and 2020, indicating that the company was generating operating profits from its assets. However, it turned negative in 2021, 2023, and 2024, implying that the company's operating income was insufficient to cover its asset base.
2. Return on Assets (ROA): The overall ROA has been inconsistent, ranging from negative values to exceptionally high positive values. The significant fluctuation suggests variability in the company's ability to generate profits relative to its total assets. The extremely high ROA in 2022 could be a result of high asset turnover or efficient utilization of assets to generate income.
3. Return on Total Capital: The return on total capital also shows a fluctuating pattern over the period. This ratio takes into account both debt and equity financing, indicating how effectively the company has utilized its total capital to generate profits. The negative returns in 2020 and 2024 suggest that the company may not have been utilizing its total capital efficiently during those years.
4. Return on Equity (ROE): The ROE has shown similar fluctuations, with negative returns in 2020 and 2024. The ROE peaked in 2022, indicating that the company generated significant returns relative to its equity base during that period.
In summary, the profitability ratios of Alpha and Omega Semiconductor Ltd demonstrate varying levels of profitability and efficiency in utilizing assets and capital over the past five years. It is essential for the company to focus on improving its operating performance and capital utilization to enhance overall profitability and shareholder value.