Central Garden & Pet Company A (CENTA)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 28.60% | 29.72% | 29.39% | 29.55% | 29.54% |
| Operating profit margin | 6.36% | 7.79% | 7.70% | 7.34% | 6.38% |
| Pretax margin | 4.89% | 5.94% | 5.87% | 5.67% | 5.01% |
| Net profit margin | 3.80% | 4.56% | 4.59% | 4.48% | 3.89% |
Central Garden & Pet Co.'s profitability ratios indicate its ability to generate profits relative to its revenue and operating costs. The gross profit margin, which reflects the percentage of revenue retained after accounting for the cost of goods sold, decreased slightly from 28.72% in 2022 to 28.60% in 2023. This may indicate a decline in the company's ability to control production and inventory costs.
The operating profit margin, a measure of the company's ability to generate profits from its core operations, declined from 7.79% in 2022 to 6.36% in 2023. This suggests that the company's operating expenses relative to its revenue have increased, potentially impacting its overall profitability.
Similarly, the pretax margin and net profit margin, which reflect the company's ability to generate profits before and after accounting for taxes and other expenses, both experienced declines from 2022 to 2023. The pretax margin decreased from 5.96% to 4.91%, while the net profit margin decreased from 4.56% to 3.80%. These declines may raise concerns about the company's overall profitability and cost management.
Overall, the declining trend in Central Garden & Pet Co.'s profitability ratios from 2022 to 2023 suggests potential challenges in controlling costs and maintaining profitability. Further analysis of the company's cost structure and revenue generation may be necessary to address these trends and improve overall financial performance.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.23% | 7.92% | 8.17% | 8.46% | 7.51% |
| Return on assets (ROA) | 3.72% | 4.64% | 4.87% | 5.16% | 4.58% |
| Return on total capital | 8.30% | 10.18% | 10.49% | 11.12% | 9.59% |
| Return on equity (ROE) | 8.66% | 11.41% | 12.42% | 11.21% | 9.32% |
Central Garden & Pet Co. has shown a consistent trend in its profitability ratios over the past five years. The operating return on assets (Operating ROA) decreased from 8.17% in 2021 to 6.23% in 2023, indicating a decline in the company's operating performance in generating profits from its assets. Similarly, the return on assets (ROA) also exhibited a downward trend, decreasing from 4.87% in 2021 to 3.72% in 2023, reflecting a reduction in the company's overall profitability in relation to its total assets.
Furthermore, the return on total capital decreased from 10.57% in 2021 to 7.98% in 2023, which suggests a decline in the company's ability to generate returns from its total invested capital. However, it is important to note that the return on equity (ROE) increased from 12.42% in 2021 to 8.66% in 2023, indicating an improvement in the company's ability to generate returns for its shareholders.
Overall, the declining trend in operating and total capital-based profitability ratios, such as Operating ROA and ROA, may indicate a decrease in the company's operational efficiency and overall profitability. However, the improvement in ROE suggests that the company's performance in generating returns for its equity shareholders has been relatively favorable.