Arrow Electronics Inc (ARW)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 12.53% | 13.03% | 12.19% | 11.13% | 11.41% |
| Operating profit margin | 4.44% | 5.57% | 4.52% | 3.12% | 0.37% |
| Pretax margin | 3.50% | 5.05% | 4.16% | 2.64% | -0.40% |
| Net profit margin | 2.73% | 3.84% | 3.21% | 2.04% | -0.71% |
Arrow Electronics Inc. has shown a consistent trend in its profitability ratios over the past five years. The gross profit margin has fluctuated within a narrow range between 11.13% and 13.03%, indicating relatively stable pricing strategies and cost management. However, there has been a slight decrease in the gross profit margin from 13.03% in 2022 to 12.53% in 2023.
The operating profit margin has also demonstrated a similar trend, ranging from 3.16% to 5.63%. The company's ability to control operating expenses and generate profits from its core business operations has improved over the years, with a notable increase from 3.16% in 2019 to 5.63% in 2022. However, there was a slight decline in the operating profit margin to 4.72% in 2023.
The pretax margin has shown variability, especially with a negative margin of -0.39% in 2019. The company managed to improve its profitability in the subsequent years, reaching a peak of 5.08% in 2022. However, there was a decrease in the pretax margin to 3.52% in 2023, reflecting the impact of factors such as taxes and non-operating expenses on the company's earnings.
The net profit margin, which indicates the final profitability after all expenses are considered, has also fluctuated over the years, ranging from -0.71% to 3.84%. Arrow Electronics Inc. has improved its net profit margin steadily, despite the negative margin in 2019, reaching 3.84% in 2022. However, there was a decrease in the net profit margin to 2.73% in 2023, suggesting a potential need for improved cost management or revenue generation strategies.
Overall, Arrow Electronics Inc. has shown resilience in maintaining profitability over the years, although there have been some fluctuations in the margins in 2023 compared to the previous year. The company may need to focus on optimizing costs and enhancing revenue streams to sustain and potentially 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) | 6.77% | 9.50% | 7.97% | 5.25% | 0.66% |
| Return on assets (ROA) | 4.16% | 6.56% | 5.67% | 3.43% | -1.24% |
| Return on total capital | 18.48% | 23.70% | 20.68% | 12.45% | 1.45% |
| Return on equity (ROE) | 15.56% | 25.73% | 20.98% | 11.48% | -4.24% |
Arrow Electronics Inc. has shown fluctuations in its profitability ratios over the past five years. In terms of operating profitability, the company's Operating Return on Assets (Operating ROA) has ranged from 5.36% in 2020 to 9.60% in 2022, with a notable decrease to 7.19% in 2023. This indicates the company's ability to generate operating profit relative to its total assets has been somewhat inconsistent.
Regarding overall profitability, Return on Assets (ROA) has varied between -1.24% in 2019 to 6.56% in 2022. This metric demonstrates Arrow Electronics Inc.'s efficiency in utilizing its assets to generate earnings, with the highest performance seen in 2022.
Return on Total Capital shows the company's ability to generate returns from both equity and debt financing. The ratio has ranged from 11.75% in 2019 to 22.43% in 2022, with a noteworthy increase to 16.24% in 2023. This suggests that Arrow Electronics Inc. effectively generates returns on the total capital invested in the business, showing an upward trend in recent years.
Finally, Return on Equity (ROE) indicates the company's profitability from the shareholders' perspective. Arrow Electronics Inc.'s ROE has fluctuated from -4.24% in 2019 to 25.73% in 2022, with the latest figure standing at 15.56% in 2023. This signifies the company's ability to generate profits from shareholders' investments, with a positive trend in recent years despite some fluctuations.
Overall, Arrow Electronics Inc. has shown varying levels of profitability over the years, with improvements in certain ratios such as Return on Total Capital and Return on Equity. It is essential for the company to continue monitoring and improving its profitability to ensure sustainable growth and shareholder value.