Avery Dennison Corp (AVY)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 28.90% | 27.23% | 26.60% | 27.51% | 27.59% |
| Operating profit margin | 12.74% | 11.52% | 11.99% | 12.64% | 12.29% |
| Pretax margin | 10.89% | 8.31% | 11.06% | 11.81% | 10.58% |
| Net profit margin | 8.05% | 6.01% | 8.38% | 8.80% | 7.97% |
Avery Dennison Corp's gross profit margin has shown a slight decline from 2020 to 2022 but has experienced an improvement in 2023 and a significant increase in 2024, indicating the company's ability to generate more profit from its revenue. The operating profit margin has been relatively stable over the years, with a slight increase in 2021 and 2024, suggesting efficient management of operating expenses. The pretax margin fluctuated during the period, reaching its highest point in 2021 and decreasing notably in 2023 before recovering in 2024. This implies varying levels of profitability before accounting for taxes.
The net profit margin, which indicates the company's bottom-line profitability, peaked in 2021 before declining significantly in 2023 and recovering in 2024. Overall, Avery Dennison Corp has demonstrated the ability to maintain healthy levels of profitability, albeit with some fluctuations, with the most notable improvement seen in the gross profit margin in 2024.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.27% | 11.74% | 13.63% | 13.33% | 14.05% |
| Return on assets (ROA) | 8.39% | 6.13% | 9.52% | 9.28% | 9.11% |
| Return on total capital | 48.10% | 38.24% | 53.31% | 55.23% | 57.12% |
| Return on equity (ROE) | 30.40% | 23.64% | 37.26% | 38.46% | 37.06% |
Avery Dennison Corp's profitability ratios demonstrate a fluctuating trend over the period from December 31, 2020, to December 31, 2024.
1. Operating return on assets (Operating ROA) ranged from 13.33% to 14.05% between 2020 and 2024, indicating the company's ability to generate operating income relative to its total assets remained relatively stable.
2. Return on assets (ROA) ranged from 6.13% to 9.52% during the same period. The decline in ROA in 2023 suggests a decrease in the company's efficiency in generating profits from its total assets, though it showed some improvement in 2024.
3. Return on total capital decreased from 57.12% in 2020 to 48.10% in 2024. This indicates a reduction in the company's ability to generate profits compared to its total capital employed over the period.
4. Return on equity (ROE) also declined from 37.06% in 2020 to 30.40% in 2024. The decreasing trend in ROE reflects a diminishing ability to generate profits for shareholders relative to their equity investments in the company.
Overall, while Avery Dennison Corp maintained stable or slightly improving operating efficiency ratios, the return on assets, return on total capital, and return on equity ratios showed a decline over the period, indicating potential challenges in maximizing profits and returns for both total capital and equity providers.