Chemed Corp (CHE)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 35.14% | 35.18% | 35.84% | 35.98% | 33.73% |
| Operating profit margin | 15.07% | 15.04% | 16.09% | 16.04% | 18.74% |
| Pretax margin | 16.43% | 15.47% | 15.44% | 16.38% | 19.04% |
| Net profit margin | 12.42% | 12.03% | 11.69% | 12.55% | 15.36% |
Chemed Corp's profitability ratios showed a mixed performance over the past five years. The gross profit margin improved from 33.73% in 2020 to 35.14% in 2024, indicating the company's ability to generate more profit from its core operations after accounting for the cost of goods sold.
However, the operating profit margin saw a decline from 18.74% in 2020 to 15.07% in 2024, suggesting a decrease in efficiency in managing operating expenses relative to revenue. Similarly, the pretax margin decreased from 19.04% in 2020 to 16.43% in 2024, indicating a decline in profitability before considering taxes.
The net profit margin also experienced a decline from 15.36% in 2020 to 12.42% in 2024, reflecting the company's reduced ability to convert revenue into net income after accounting for all expenses, including taxes.
Overall, while Chemed Corp demonstrated improvement in its gross profit margin, the decline in operating profit margin, pretax margin, and net profit margin over the period suggests challenges in controlling operating expenses and maintaining profitability levels.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 21.96% | 20.42% | 23.82% | 25.55% | 27.16% |
| Return on assets (ROA) | 18.10% | 16.34% | 17.31% | 20.00% | 22.26% |
| Return on total capital | 1,012.09% | 31.91% | 41.85% | 56.51% | 44.20% |
| Return on equity (ROE) | 761.76% | 24.60% | 31.25% | 43.09% | 35.45% |
Based on the data provided, Chemed Corp's profitability ratios exhibit a fluctuating trend over the years.
1. Operating Return on Assets (Operating ROA): Chemed Corp's Operating ROA has been declining from 27.16% in 2020 to 20.42% in 2023 before showing a slight increase to 21.96% in 2024. This ratio indicates the company's ability to generate profits from its operating activities relative to its total assets.
2. Return on Assets (ROA): The ROA ratio has also shown a decreasing trend, from 22.26% in 2020 to 18.10% in 2024. This ratio reflects the company's overall profitability in relation to its total assets, including both operating and non-operating activities.
3. Return on Total Capital: Chemed Corp's Return on Total Capital spiked significantly in 2024 to 1,012.09%, which may be an anomaly or the result of certain financial events during that period. Prior to that, the ratio ranged from 41.85% in 2022 to 56.51% in 2021. This ratio measures the company's ability to generate returns from both its equity and debt capital.
4. Return on Equity (ROE): The Return on Equity ratio has shown a similar pattern to the Return on Total Capital, with a substantial increase to 761.76% in 2024. This ratio also experienced fluctuations in the preceding years, declining from 35.45% in 2020 to 24.60% in 2023 before the notable increase in 2024. ROE indicates the company's ability to generate profits for its shareholders from the equity invested in the company.
Overall, the profitability ratios of Chemed Corp reflect varying levels of profitability and efficiency in utilizing its assets and capital over the years, with some fluctuations potentially warranting further investigation to understand the underlying factors driving these changes.