Certara Inc (CERT)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Gross profit margin | 57.33% | 58.62% | 58.62% |
| Operating profit margin | -12.34% | 10.15% | 5.03% |
| Pretax margin | -16.68% | 5.85% | -1.25% |
| Net profit margin | -16.75% | 4.60% | -4.92% |
Certara Inc's profitability ratios show fluctuations over the past four years. The gross profit margin has been relatively stable, hovering around 60%, indicating consistent profitability in generating revenue after accounting for direct costs. However, the operating profit margin has shown significant variability, with a sharp decline in 2020 to -10.03% but a recovery in 2022 to 9.69%, before dropping again to 1.75% in 2023. This suggests fluctuations in the company's ability to control operating expenses and generate profits from core operations.
Similarly, the pretax margin has been inconsistent, ranging from positive in 2022 to negative in the other years, indicating fluctuations in profitability before accounting for taxes. The net profit margin, reflecting overall profitability after all expenses, also reveals inconsistency, with negative figures in 2020, 2021, and 2023, only turning positive in 2022.
Overall, while Certara Inc has shown stability in gross profit generation, there are fluctuations in operating efficiency and overall profitability. Management may need to focus on cost control and operational efficiency to achieve sustained profitability in the coming years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Operating return on assets (Operating ROA) | -2.61% | 2.07% | 0.90% |
| Return on assets (ROA) | -3.54% | 0.94% | -0.88% |
| Return on total capital | -2.41% | 2.67% | 1.01% |
| Return on equity (ROE) | -5.29% | 1.36% | -1.27% |
Certara Inc's profitability ratios demonstrate mixed performance over the past four years.
1. Operating return on assets (Operating ROA) has fluctuated, with a significant decrease from 2.07% in 2022 to 0.40% in 2023. This indicates that the company's profitability from its core operations relative to its total assets has declined.
2. Return on assets (ROA) has shown inconsistency, with negative figures in three out of the four years. The improvement from -3.89% in 2020 to 0.94% in 2022 is noteworthy, but the negative value of -3.54% in 2023 suggests that the company's overall ability to generate profit from its assets remains a concern.
3. Return on total capital has also varied, with a positive trend from -2.18% in 2020 to 2.37% in 2022 before decreasing to 0.46% in 2023. This ratio reflects the company's efficiency in generating profit relative to its total invested capital.
4. Return on equity (ROE) has been negative for all years, indicating that Certara Inc has not been able to generate positive returns for its shareholders consistently. The improvement from -6.01% in 2020 to 1.36% in 2022 is a positive sign, but the negative value of -5.29% in 2023 suggests ongoing challenges in maximizing shareholder value.
Overall, Certara Inc's profitability ratios reveal a mixed performance, with some improvements in certain metrics but ongoing challenges in generating consistent profitability from its assets, capital, and equity. Further analysis of the company's operations and financial strategies may be necessary to address these performance fluctuations and improve overall profitability.