Best Buy Co. Inc (BBY)
Profitability ratios
Return on sales
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 22.10% | 21.41% | 22.49% | 22.37% | 23.03% |
| Operating profit margin | 3.62% | 3.88% | 5.87% | 5.06% | 4.60% |
| Pretax margin | 3.73% | 3.86% | 5.85% | 5.03% | 4.57% |
| Net profit margin | 2.86% | 3.06% | 4.74% | 3.80% | 3.53% |
The profitability ratios of Best Buy Co. Inc have demonstrated some fluctuation over the past five years.
- Gross profit margin, which indicates the efficiency of the company in generating revenue after accounting for the cost of goods sold, has shown a slight decrease from 23.03% in 2020 to 22.10% in 2024.
- Operating profit margin, reflecting the company's ability to control operating expenses, has varied from 4.60% in 2020 to 3.62% in 2024.
- Pretax margin, measuring the percentage of revenue that remains after accounting for all operating expenses but before taxes, has fluctuated from 4.57% in 2020 to 3.73% in 2024.
- Net profit margin, which indicates the company's overall profitability after all expenses have been deducted, has ranged from 3.53% in 2020 to 2.86% in 2024.
Overall, there has been a general trend of decreasing profitability margins for Best Buy Co. Inc over the five-year period, signaling potential challenges in controlling costs and maximizing profits. Further analysis and investigation into the factors influencing these trends would be necessary to understand the underlying causes and potential implications for the company's financial health.
Return on investment
| Feb 3, 2024 | Jan 28, 2023 | Jan 29, 2022 | Jan 30, 2021 | Feb 1, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.52% | 11.36% | 17.36% | 12.54% | 12.89% |
| Return on assets (ROA) | 8.29% | 8.98% | 14.02% | 9.43% | 9.88% |
| Return on total capital | 39.81% | 46.12% | 72.07% | 41.59% | 43.43% |
| Return on equity (ROE) | 40.65% | 50.77% | 81.26% | 39.20% | 44.29% |
Best Buy Co. Inc's profitability ratios have shown varying trends over the past five years.
1. Operating return on assets (Operating ROA) measures how efficiently the company generates operating profit from its assets. Best Buy's Operating ROA has been relatively stable, ranging from 10.52% to 17.36% over the period. This indicates that the company has been able to effectively utilize its assets to generate operating income.
2. Return on assets (ROA) reflects the company's overall profitability in relation to its total assets. Best Buy's ROA has also shown consistency, with values ranging from 8.29% to 14.02%. This suggests that the company is able to generate profits from its total assets consistently.
3. Return on total capital measures the efficiency of the company in generating returns from both debt and equity capital. Best Buy's Return on total capital has shown a fluctuating trend, with values ranging from 39.81% to 72.07% over the five-year period. This indicates variability in the company's ability to generate returns from its total capital.
4. Return on equity (ROE) indicates the profitability generated from shareholders' equity. Best Buy's ROE has also demonstrated fluctuation, with values ranging from 39.20% to 81.26% over the period. This suggests that the company's ability to generate profits for its shareholders has been volatile.
In summary, Best Buy Co. Inc has maintained stable Operating ROA and ROA over the years, while Return on total capital and ROE have shown more variability. It would be important for investors and stakeholders to further investigate the factors contributing to these fluctuations in profitability ratios.