Colgate-Palmolive Company (CL)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 58.21% | 57.04% | 59.55% | 60.82% | 59.42% |
| Operating profit margin | 20.48% | 16.10% | 19.13% | 23.59% | 22.65% |
| Pretax margin | 16.64% | 13.79% | 16.73% | 21.14% | 20.02% |
| Net profit margin | 11.82% | 9.93% | 12.43% | 16.36% | 15.08% |
Colgate-Palmolive Co. has shown stable and relatively healthy profitability ratios over the past five years. The gross profit margin has fluctuated slightly, ranging from 57.04% to 60.82%, with the highest margin recorded in 2020. This indicates the company's ability to efficiently manage its cost of goods sold.
The operating profit margin has remained fairly consistent, hovering around 20-23%, showcasing the company's ability to generate profits from its core operations. The pretax margin has displayed more variability, with a dip in 2022 followed by a rebound in 2023. This suggests fluctuations in the company's operating expenses and interest costs.
The net profit margin has also shown stability, ranging from 9.93% to 16.36%. The margins in the range of 11.82% to 15.08% indicate Colgate-Palmolive Co.'s ability to convert revenue into bottom-line profits after accounting for all expenses and taxes.
Overall, Colgate-Palmolive Co. has maintained solid profitability levels over the past five years, demonstrating efficient cost management and the ability to generate profits from its operations.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 24.30% | 18.39% | 22.15% | 24.40% | 23.64% |
| Return on assets (ROA) | 14.03% | 11.35% | 14.40% | 16.93% | 15.74% |
| Return on total capital | 45.13% | 31.65% | 42.70% | 48.10% | 47.70% |
| Return on equity (ROE) | 377.67% | 445.14% | 355.67% | 362.72% | 2,023.08% |
Colgate-Palmolive Co.'s profitability ratios show a mixed performance over the past five years.
1. Operating return on assets (Operating ROA) has been relatively stable, ranging from 22.90% to 25.79%. This ratio indicates the company's ability to generate operating income from its assets, showing a healthy trend of generating consistent profits from its operations.
2. Return on assets (ROA) has fluctuated, starting at 15.74% in 2019, increasing to 16.93% in 2020, then decreasing to 11.35% in 2022 before rising again to 14.03% in 2023. This ratio measures the company's overall efficiency in generating profits from its total assets.
3. Return on total capital reflects a more volatile pattern, with significant fluctuations year over year, ranging from 39.43% to 49.54%. This ratio considers both equity and debt in determining how effectively the company is using all its capital to generate profits.
4. Return on equity (ROE) shows a dramatic drop in 2020, rebounding in later years. The enormous jump in ROE in 2019 to 2,023.08% appears to be an anomaly or could be influenced by unusual events. ROE reflects the company's ability to generate profits from shareholders' equity, with the company achieving exceptionally high returns in some years.
In summary, Colgate-Palmolive Co. has shown a generally strong ability to generate profits from its assets and capital over the years, with a few fluctuations that could be due to various internal and external factors affecting the company's performance. Investors and analysts should further investigate the reasons behind these fluctuations to gain insights into the company's financial health and sustainability.