Air Products and Chemicals Inc (APD)
Profitability ratios
Return on sales
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 23.65% | 19.81% | 18.13% | 21.72% | 33.85% |
| Operating profit margin | 36.91% | 19.80% | 18.42% | 22.10% | 25.27% |
| Pretax margin | 39.45% | 22.63% | 21.71% | 24.82% | 26.71% |
| Net profit margin | 31.64% | 18.26% | 17.77% | 20.33% | 21.30% |
Air Products and Chemicals Inc has shown varying levels of profitability over the past five years as indicated by its profitability ratios.
1. Gross Profit Margin:
The gross profit margin measures the percentage of sales revenue that exceeds the cost of goods sold. Air Products and Chemicals Inc has shown an improving trend in gross profit margin from 2018 to 2020, with a significant decline in 2021, a slight recovery in 2022, and further improvement in 2023 and 2024. The company's ability to control production costs and maintain a healthy gross profit margin is critical for its overall profitability.
2. Operating Profit Margin:
The operating profit margin indicates the percentage of sales that remains after deducting operating expenses. Air Products and Chemicals Inc has demonstrated significant fluctuations in operating profit margin over the past five years. The company witnessed a sharp increase in 2024 compared to the previous years, indicating improved operational efficiency and cost management.
3. Pretax Margin:
The pretax margin reveals the percentage of sales that translates into earnings before taxes. Air Products and Chemicals Inc has shown an upward trend in pretax margin from 2020 to 2024, reflecting improved profitability before considering taxation. This suggests that the company has been successful in generating higher profits relative to its revenue.
4. Net Profit Margin:
The net profit margin measures the percentage of sales that translates into net income after accounting for all expenses. Air Products and Chemicals Inc has demonstrated fluctuating net profit margins over the past five years. The company experienced a decline in 2021, followed by a recovery in 2022 and continued improvement in 2023 and 2024. This indicates variations in the company's ability to manage expenses and generate bottom-line profits.
Overall, Air Products and Chemicals Inc has shown a mixed performance in terms of profitability ratios over the past five years. While there have been fluctuations in margins, the company's improving trend in recent years suggests a positive trajectory in profitability and operational efficiency.
Return on investment
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 11.29% | 7.80% | 8.60% | 8.49% | 8.89% |
| Return on assets (ROA) | 9.67% | 7.19% | 8.30% | 7.82% | 7.50% |
| Return on total capital | 26.21% | 21.16% | 21.95% | 19.97% | 20.48% |
| Return on equity (ROE) | 22.47% | 16.07% | 17.16% | 15.50% | 15.62% |
Air Products and Chemicals Inc's profitability ratios show a positive trend over the past five years, indicating improving efficiency in generating profits from its assets and capital. The Operating Return on Assets (Operating ROA) has increased steadily from 8.49% in 2021 to 11.29% in 2024, reflecting the company's ability to generate operating income relative to its total assets.
The Return on Assets (ROA) has also shown improvement over the years, reaching 9.67% in 2024 compared to 7.50% in 2020. This suggests that the company is becoming more effective in utilizing its assets to generate profits. Moreover, the Return on Total Capital has exhibited a similar upward trajectory, increasing from 19.97% in 2021 to 26.21% in 2024. This indicates Air Products and Chemicals Inc's enhanced ability to generate returns on its total invested capital.
Additionally, the Return on Equity (ROE) has also shown a positive trend, with a gradual increase from 15.50% in 2021 to 22.47% in 2024. This indicates that the company is efficiently generating profits for its shareholders relative to their equity investments.
Overall, the improving profitability ratios of Air Products and Chemicals Inc suggest that the company has been effectively utilizing its assets and capital to generate increasing returns for its stakeholders over the analyzed period.