Black Hills Corporation (BKH)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 83.95% | 96.93% | 97.21% | 96.70% | 96.44% |
| Operating profit margin | 23.65% | 20.28% | 17.84% | 21.01% | 25.24% |
| Pretax margin | 14.54% | 12.35% | 11.11% | 12.51% | 15.35% |
| Net profit margin | 12.84% | 11.25% | 10.13% | 12.15% | 13.41% |
Firstly, let's analyze Black Hills Corporation's profitability ratios based on the provided data:
1. Gross Profit Margin: Black Hills Corporation has shown a consistent trend of improvement in its gross profit margin over the years, increasing from 96.44% in 2020 to 97.21% in 2022. However, there was a slight dip in 2023 to 96.93% and a more significant decrease to 83.95% in 2024. This decrease in 2024 indicates that the company's cost of goods sold relative to its revenue has increased considerably.
2. Operating Profit Margin: The operating profit margin of Black Hills Corporation fluctuated during the period under review, with a substantial drop from 25.24% in 2020 to 17.84% in 2022, before rebounding to 23.65% in 2024. This fluctuation suggests that the company's operating expenses relative to its revenue varied significantly, impacting its profitability.
3. Pretax Margin: Black Hills Corporation's pretax margin followed a somewhat similar pattern to its operating profit margin, declining from 15.35% in 2020 to 11.11% in 2022 before increasing to 14.54% in 2024. This indicates that the company's pre-tax profitability was impacted by fluctuations in operating expenses and other income or expenses.
4. Net Profit Margin: The net profit margin of the company also experienced fluctuations during the period, dropping from 13.41% in 2020 to 10.13% in 2022, before recovering to 12.84% in 2024. This indicates that Black Hills Corporation's bottom line profitability was impacted by various factors, including operating expenses, taxes, and other income or expenses.
In conclusion, the profitability ratios of Black Hills Corporation reflect a mixture of trends including improvements, fluctuations, and declines over the years. It is crucial for the company to closely monitor its cost management, revenue generation, and operational efficiency to maintain and enhance its overall profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.02% | 4.91% | 4.73% | 4.48% | 5.30% |
| Return on assets (ROA) | 2.72% | 2.73% | 2.69% | 2.59% | 2.81% |
| Return on total capital | 6.34% | 6.49% | 6.73% | 5.73% | 6.63% |
| Return on equity (ROE) | 7.80% | 8.15% | 8.63% | 8.49% | 8.89% |
Black Hills Corporation's profitability ratios reflect a stable performance over the years.
- Operating return on assets (Operating ROA) decreased from 5.3% in 2020 to 4.48% in 2021 but showed a slight improvement to 5.02% in 2024. This indicates that the company's operating income generated from its assets declined initially but then recovered over the years.
- Return on assets (ROA) remained relatively stable, ranging from 2.59% to 2.81% from 2020 to 2024. This suggests that the company's overall profitability in relation to its total assets has been consistent.
- Return on total capital fluctuated between 5.73% and 6.73% from 2020 to 2023 before declining slightly to 6.34% in 2024. This ratio shows the company's ability to generate returns for both debt and equity investors, with a notable improvement in 2022.
- Return on equity (ROE) saw a gradual decline from 8.89% in 2020 to 7.80% in 2024. This indicates a decreasing trend in the returns available to common equity shareholders over the years.
In summary, while Black Hills Corporation has maintained a relatively stable performance in terms of ROA and return on total capital, there has been a decline in operating ROA and ROE. Overall, the company's profitability ratios demonstrate a need for attention to improve returns for shareholders.