Cleveland-Cliffs Inc (CLF)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | -3.70% | 2.48% | 8.17% | 19.42% | -2.93% |
| Operating profit margin | -3.94% | 3.08% | 8.43% | 19.62% | -2.65% |
| Pretax margin | -5.16% | 2.49% | 7.65% | 18.40% | -4.35% |
| Net profit margin | -3.93% | 1.81% | 5.81% | 14.62% | -2.28% |
Cleveland-Cliffs Inc's profitability ratios have shown varying trends over the years. The gross profit margin, a measure of profitability after accounting for the cost of goods sold, experienced significant fluctuations. From a negative 2.93% in 2020, it improved to 19.42% in 2021, but then declined to 8.17% in 2022 before dropping further to 2.48% in 2023. In 2024, the gross profit margin turned negative at -3.70%.
Similarly, the operating profit margin, which indicates the company's profitability from core operations, followed a similar pattern, starting at negative -2.65% in 2020, rising to 19.62% in 2021, and then decreasing to 8.43% in 2022 and 3.08% in 2023. However, by 2024, it dropped to -3.94%.
The pretax margin, representing profitability before taxes, also displayed fluctuations. It was negative at -4.35% in 2020, increased to 18.40% in 2021, then decreased to 7.65% in 2022 and further to 2.49% in 2023. Finally, in 2024, the pretax margin was negative at -5.16%.
Lastly, the net profit margin, which reveals the company's bottom-line profitability, started at negative 2.28% in 2020 and improved to 14.62% in 2021. However, it decreased to 5.81% in 2022 and further dropped to 1.81% in 2023. In 2024, the net profit margin fell back into negative territory at -3.93%.
Overall, the profitability ratios of Cleveland-Cliffs Inc have shown a mix of improvement and decline, highlighting potential challenges in maintaining consistent profitability over the years. It is essential for the company to closely monitor its cost structures and revenue generation to enhance overall profitability performance in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -3.61% | 3.86% | 10.34% | 21.14% | -0.85% |
| Return on assets (ROA) | -3.60% | 2.28% | 7.12% | 15.75% | -0.73% |
| Return on total capital | -5.51% | 6.14% | 16.10% | 37.40% | -1.92% |
| Return on equity (ROE) | -11.31% | 5.06% | 17.14% | 54.43% | -6.05% |
Based on the provided data for Cleveland-Cliffs Inc, the profitability ratios exhibit fluctuation over the period from December 31, 2020, to December 31, 2024.
1. Operating Return on Assets (Operating ROA):
- There is a notable improvement in the Operating ROA from -0.85% in 2020 to 21.14% in 2021, indicating a significant increase in the company's operating profits generated per dollar of assets.
- In the subsequent years, the Operating ROA experiences a decline, dropping to 3.86% in 2023 and turning negative at -3.61% in 2024, suggesting a decrease in operational efficiency and profitability over this period.
2. Return on Assets (ROA):
- The ROA similarly displays an upward trend from -0.73% in 2020 to 15.75% in 2021, showcasing an enhanced ability to generate profits relative to the total assets.
- Nonetheless, the ROA then follows a downward trajectory, reaching -3.60% in 2024, implying that the company's overall profitability in relation to its assets diminishes by the end of the period.
3. Return on Total Capital:
- The Return on Total Capital reflects a substantial improvement from -1.92% in 2020 to 37.40% in 2021, indicating enhanced returns generated from the total capital employed by the company.
- However, the ratio declines in the subsequent years, dropping to -5.51% in 2024, which may suggest inefficiencies in capital utilization or declining profitability relative to the total invested capital.
4. Return on Equity (ROE):
- The Return on Equity experiences a remarkable surge from -6.05% in 2020 to 54.43% in 2021, signifying a substantial increase in the returns earned for the shareholders' equity.
- Subsequently, the ROE exhibits a declining trend, falling to -11.31% in 2024, implying that the company's ability to generate profits from shareholders' equity weakens towards the end of the period.
In conclusion, the analysis of Cleveland-Cliffs Inc's profitability ratios demonstrates fluctuations in operational efficiency, overall profitability, and returns to both assets and capital over the specified period, with varying impacts on the company's financial performance and shareholder value.