Aramark Holdings (ARMK)
Profitability ratios
Return on sales
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 3.45% | 5.60% | 3.98% | 2.16% | -2.37% |
| Operating profit margin | 4.05% | 3.25% | 3.94% | 1.62% | -2.13% |
| Pretax margin | 2.10% | 4.42% | 1.61% | -1.11% | -5.21% |
| Net profit margin | 1.51% | 3.50% | 1.22% | -0.77% | -3.71% |
Aramark Holdings' profitability ratios have fluctuated in recent years, with some improvement seen in the most recent period.
- The gross profit margin has shown a downward trend from 2020 to 2022, but there was a slight increase in 2023 and further improvement in 2024. This ratio indicates the percentage of revenue that remains after accounting for the cost of goods sold.
- The operating profit margin has also varied over the years, with a notable decrease in 2020 followed by some recovery in subsequent years, reaching its highest level in 2024. This ratio reflects the company's efficiency in managing its operating expenses.
- The pretax margin demonstrates the company's ability to generate profits before taxes. After experiencing negative margins in 2020 and 2021, there was a significant rebound in 2022 and further improvement in 2023 and 2024.
- The net profit margin, which provides insight into the company's bottom line profitability, has displayed a similar pattern to the pretax margin, with growth in profitability in recent years.
Overall, Aramark Holdings has shown some positive momentum in its profitability ratios, with improvements in gross profit margin, operating profit margin, pretax margin, and net profit margin in the most recent period. This suggests the company may be effectively managing its costs and operations to enhance its overall profitability.
Return on investment
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.57% | 3.70% | 4.17% | 1.33% | -1.69% |
| Return on assets (ROA) | 2.07% | 4.00% | 1.29% | -0.63% | -2.94% |
| Return on total capital | 23.25% | 34.83% | 21.04% | 10.37% | -9.44% |
| Return on equity (ROE) | 8.64% | 18.16% | 6.42% | -3.34% | -16.87% |
Aramark Holdings' profitability performance, as reflected in its profitability ratios, has varied over the past five years.
- Operating return on assets (Operating ROA) shows the company's ability to generate profits from its assets used in its core operations. Aramark's Operating ROA has been trending positively, increasing from 1.33% in 2021 to 5.57% in 2024, indicating an improvement in operational efficiency and profitability.
- Return on assets (ROA) measures overall profitability by assessing how efficiently the company uses its assets to generate earnings. Aramark's ROA has been volatile over the years, with a significant improvement in 2023 and a subsequent decline in 2024. This ratio was 2.07% in 2024, indicating that the company is generating $0.0207 in profit for every dollar of assets.
- Return on total capital reflects how effectively the company generates returns for both its debt and equity investors. Aramark's return on total capital has been fluctuating, with a notable increase in 2023 followed by a slight decrease in 2024. The ratio was 23.25% in 2024, demonstrating that the company is producing a return of 0.2325 for every dollar of total capital employed.
- Return on equity (ROE) shows the profitability of the company from the perspective of its equity shareholders. Aramark's ROE has been inconsistent, with positive figures in some years and negative figures in others. In 2024, the ROE was 8.64%, suggesting that the company generated $0.0864 of profit for every dollar of equity.
Overall, Aramark Holdings has shown some improvement in its profitability ratios in recent years, particularly in its Operating ROA and Return on Total Capital. However, the company still faces challenges in consistently generating strong returns for its investors, as evidenced by the fluctuations in ROA and ROE. Analysis of the trends over time can provide insights into the company's operational efficiency and financial performance.