Cleveland-Cliffs Inc (CLF)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 2.48% | 8.17% | 19.42% | -2.93% | 28.93% |
| Operating profit margin | 3.08% | 8.43% | 19.62% | -2.65% | 21.56% |
| Pretax margin | 2.49% | 7.65% | 18.40% | -4.35% | 15.63% |
| Net profit margin | 1.81% | 5.81% | 14.62% | -2.28% | 14.72% |
Cleveland-Cliffs Inc's profitability ratios have exhibited fluctuating trends over the past five years. The gross profit margin has shown a declining pattern, dropping from 28.93% in 2019 to 6.32% in 2023. This may indicate challenges in efficiently managing production costs and pricing strategies.
Similarly, the operating profit margin has also decreased over the years, indicating declining operational efficiency and profitability. The pretax margin has fluctuated, with a notable negative percentage in 2020, suggesting financial difficulties during that year. Lastly, the net profit margin has shown variability with significant declines in 2020 and 2019, possibly due to operational challenges or external economic factors.
Overall, the declining trends in these profitability ratios suggest that Cleveland-Cliffs Inc may be facing challenges in generating profits and controlling costs effectively. Further analysis, including an examination of the company's operational and financial strategies, is recommended to address these issues and improve overall profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.86% | 10.34% | 21.14% | -0.85% | 12.24% |
| Return on assets (ROA) | 2.28% | 7.12% | 15.75% | -0.73% | 8.36% |
| Return on total capital | 6.14% | 16.10% | 37.40% | -1.92% | 17.35% |
| Return on equity (ROE) | 5.06% | 17.14% | 54.43% | -6.05% | 81.84% |
Cleveland-Cliffs Inc's profitability ratios show a varying trend over the five-year period from 2019 to 2023.
1. Operating Return on Assets (Operating ROA): This ratio indicates how efficiently the company's operations generate profits relative to its total assets. The trend shows a decline from 13.02% in 2019 to 4.64% in 2023, with a significant drop in 2020 and a gradual decrease thereafter.
2. Return on Assets (ROA): ROA measures the company's overall ability to generate profits from its assets. Cleveland-Cliffs experienced negative ROA in 2020, indicating losses generated from its assets. However, the ratio improved thereafter, reaching 2.28% in 2023.
3. Return on Total Capital: This ratio reflects the return generated on both equity and debt capital invested in the business. Cleveland-Cliffs saw a substantial increase in return on total capital from 2019 to 2021, reaching a peak of 38.33% in 2021, before declining to 7.38% in 2023.
4. Return on Equity (ROE): ROE measures the return generated on the shareholders' equity investment. The trend for Cleveland-Cliffs shows a significant drop in ROE in 2020, with a negative figure, followed by fluctuations but relatively lower values compared to the exceptionally high 54.43% recorded in 2021.
In summary, Cleveland-Cliffs Inc's profitability ratios exhibit fluctuations and a mix of positive and negative trends over the five-year period, reflecting the company's varying profitability performance and efficiency in generating returns for both shareholders and all capital providers.