Avis Budget Group Inc (CAR)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 71.90% | 79.82% | 71.24% | 54.24% | 60.28% |
| Operating profit margin | 12.89% | 24.58% | 13.26% | -20.27% | -4.43% |
| Pretax margin | 15.91% | 30.38% | 18.36% | -17.70% | 3.13% |
| Net profit margin | 13.59% | 23.04% | 13.80% | -12.66% | 3.29% |
Avis Budget Group Inc has displayed varying levels of profitability over the past five years as indicated by its profitability ratios. The gross profit margin has remained consistently high at 100% throughout the period, reflecting efficient cost management in generating revenue.
The operating profit margin has fluctuated, with a significant decrease in 2020 to -5.13%, indicating operational challenges that year. However, the company rebounded in 2022 with an operating profit margin of 35.92%, showcasing a strong operational performance. In 2023, the operating profit margin decreased to 24.73%, but still remained at a relatively healthy level.
The pretax margin has shown fluctuations as well, with negative margins in 2020 and 2019, suggesting difficulties in generating pre-tax profits during those years. However, the company improved its pretax margin in 2021 and 2023, showcasing better profitability before taxes.
The net profit margin, which measures the company's bottom-line profitability, has also varied over the years. The negative net profit margin in 2020 and 2019 indicates net losses during those periods. Avis Budget Group Inc improved its net profit margin in 2021 and 2023, demonstrating enhanced efficiency in converting revenue into net profits.
Overall, Avis Budget Group Inc's profitability ratios show a mix of challenges and successes in managing costs and generating profits over the past five years. It is essential for the company to sustain and improve its profitability ratios to ensure long-term financial health and shareholder value creation.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.75% | 11.37% | 5.46% | -6.24% | -1.76% |
| Return on assets (ROA) | 5.01% | 10.66% | 5.69% | -3.90% | 1.31% |
| Return on total capital | 49.68% | 98.81% | 51.14% | -17.96% | 11.42% |
| Return on equity (ROE) | — | — | — | — | 46.04% |
Avis Budget Group Inc's profitability ratios have shown varying trends over the past five years.
1. Operating return on assets (Operating ROA) has fluctuated, with a notable increase in 2022 followed by a slight decline in 2023. This ratio indicates the company's ability to generate operating income from its assets, with a range of 3.94% to 16.62% over the period.
2. Return on assets (ROA) also exhibited volatility, with a significant improvement in 2022 before dropping in 2023. This metric reflects the overall profitability of the company's assets, ranging from -3.90% to 10.66% during the period.
3. Return on total capital depicts a similar pattern, with the ratio peaking in 2022 and declining in 2023. This ratio assesses the efficiency of the company in generating returns from both equity and debt capital, with values ranging from -2.54% to 24.23%.
4. Return on equity (ROE) data is not available for the earlier years, but in 2019, it was notably high at 46.04%. ROE measures the return generated on shareholders' equity and indicates strong shareholder value creation in that year.
Overall, Avis Budget Group Inc's profitability ratios have shown mixed performance over the period, with improvements in certain years and declines in others. This indicates fluctuations in the company's ability to generate profits from its assets, capital structure, and shareholder equity.