Cars.com Inc (CARS)

Net profit margin

		Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income	US$ in thousands	118,442	17,206	10,791	-789,106	-445,324
Revenue	US$ in thousands	658,830	618,556	584,954	509,647	575,908
Net profit margin		17.98%	2.78%	1.84%	-154.83%	-77.33%

December 31, 2023 calculation

Net profit margin = Net income ÷ Revenue
= $118,442K ÷ $658,830K
= 17.98%

Net profit margin is a key financial ratio that indicates the percentage of revenue that is converted into net profit after all expenses have been deducted. The trend analysis of Cars.com's net profit margin over the past five years reveals significant fluctuations.

In 2023, the net profit margin stood at 17.19%, significantly higher than the previous year's figure of 2.63%. This indicates an improvement in the company's ability to generate profit relative to its revenue in the most recent period.

The sharp increase in net profit margin in 2023 can be attributed to various factors such as cost management, revenue growth, or one-time gains. It suggests that the company has become more efficient in controlling costs and generating profit from its operations.

It is important to note that the negative net profit margins in 2020 and 2019 (-149.24% and -73.40% respectively) indicate that the company incurred losses during those years, which may have been due to various factors such as extraordinary expenses, write-downs, or other non-recurring events.

Overall, while the recent improvement in net profit margin is a positive sign, it is essential for investors and stakeholders to closely monitor the company's financial performance and sustainability of profit generation over the long term.