Armstrong World Industries Inc (AWI)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 40.31% | 39.83% | 36.50% | 36.97% | 36.49% |
| Operating profit margin | 25.94% | 25.94% | 22.65% | 23.70% | 27.91% |
| Pretax margin | 24.06% | 23.91% | 21.18% | 21.93% | -15.52% |
| Net profit margin | 18.36% | 17.94% | 16.49% | 16.70% | -10.86% |
Armstrong World Industries Inc has shown a consistent improvement in its profitability ratios over the years. The gross profit margin increased from 36.49% in 2020 to 40.31% in 2024, indicating an enhanced efficiency in generating profit from its sales revenue.
The operating profit margin, though slightly fluctuating, remained relatively stable, ranging from 22.65% to 27.91%. This margin reflects the company's ability to control its operating expenses while generating operating profits.
The pretax margin significantly rebounded from a negative percentage in 2020 to 24.06% in 2024. This sharp recovery suggests that the company has successfully managed its pre-tax income and expenses, resulting in a healthier financial performance.
Lastly, the net profit margin, which indicates the company's bottom-line profitability, steadily increased from 2020 to 2024, showcasing improved efficiency in managing its costs and enhancing its net income. Armstrong World Industries Inc's consistent growth in profitability ratios underscores its effective operational efficiency and financial management strategies.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 20.31% | 19.36% | 16.52% | 15.20% | 14.83% |
| Return on assets (ROA) | 14.38% | 13.38% | 12.03% | 10.71% | -5.77% |
| Return on total capital | 30.71% | 28.86% | 24.26% | 23.40% | -10.30% |
| Return on equity (ROE) | 34.99% | 37.82% | 37.93% | 35.25% | -21.98% |
Armstrong World Industries Inc's profitability ratios have shown a positive trend over the years, indicating improving efficiency and effectiveness in generating profits.
1. Operating ROA has increased steadily from 14.83% in 2020 to 20.31% in 2024. This signifies that the company has been able to improve its operating performance in relation to its total assets, reflecting effective management of its operations.
2. ROA has shown significant improvement, moving from a negative value of -5.77% in 2020 to 14.38% in 2024. This indicates that the company has been able to generate positive returns from its assets over the years, which is a positive sign for investors.
3. Return on total capital has also exhibited strong growth, increasing from -10.30% in 2020 to 30.71% in 2024. This ratio indicates the overall profitability of the company's capital investments, showing that Armstrong World Industries has been able to generate higher returns for its capital providers.
4. ROE, which measures the return on shareholders' equity, has shown a mixed trend, starting from a negative value of -21.98% in 2020, reaching a peak of 37.93% in 2022, and slightly decreasing to 34.99% in 2024. This suggests that the company has been able to deliver satisfactory returns to its equity investors, although there was a slight decline in 2024.
Overall, the positive trajectory of these profitability ratios reflects Armstrong World Industries Inc's ability to optimize its resources and generate satisfactory returns for both its investors and stakeholders.