Commercial Metals Company (CMC)
Profitability ratios
Return on sales
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 7.45% | 12.35% | 16.35% | 7.91% | 17.43% |
| Operating profit margin | -3.40% | 4.45% | 13.09% | 0.14% | -4.19% |
| Pretax margin | 8.07% | 12.81% | 16.61% | 8.01% | 6.86% |
| Net profit margin | 6.16% | 9.82% | 13.34% | 6.19% | 5.16% |
Commercial Metals Company's profitability ratios have varied significantly over the past five years. The gross profit margin has experienced fluctuations, with a notable decrease from 17.43% in 2020 to 7.45% in 2024, indicating a decline in the company's ability to generate profits from its core operations.
The operating profit margin also shows inconsistency, fluctuating from -4.19% in 2020 to -3.40% in 2024, suggesting that the company has faced challenges in controlling its operating expenses and generating profits from its primary business activities.
The pretax margin reflects the company's ability to generate profits before accounting for taxes, with a peak of 16.61% in 2022 and a subsequent decrease to 8.07% in 2024. This indicates fluctuations in the company's overall profitability and operational efficiency over the years.
The net profit margin, which represents the company's bottom-line profitability after all expenses, has varied from 5.16% in 2020 to 6.16% in 2024. This suggests that while the company has managed to improve its net profitability compared to 2020, there is still room for enhancement in maximizing profits after all expenses are considered.
In conclusion, Commercial Metals Company's profitability ratios demonstrate inconsistent performance over the five-year period, with fluctuations in gross, operating, pretax, and net profit margins. The company may need to focus on improving operational efficiency, controlling expenses, and maximizing profitability to ensure sustainable financial performance in the future.
Return on investment
| Aug 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -3.93% | 5.87% | 19.14% | 0.20% | -5.57% |
| Return on assets (ROA) | 7.12% | 12.95% | 19.52% | 8.90% | 6.85% |
| Return on total capital | 15.90% | 28.20% | 47.65% | 25.53% | 22.96% |
| Return on equity (ROE) | 11.29% | 20.86% | 37.04% | 17.99% | 14.79% |
Commercial Metals Company's profitability ratios show fluctuations over the past five years. Operating ROA has been negative for the most recent year, indicating that the company's operating income generated from its assets was insufficient to cover the cost of those assets. ROA has also seen variability, with a significant decrease in 2021 followed by a slight recovery in 2022 and 2023. This ratio measures the company's overall efficiency in generating profits from its assets.
Return on total capital and ROE both show a similar pattern of fluctuation over the period. The return on total capital peaked in 2022, indicating the company's ability to generate profits from both equity and debt sources. ROE, which measures the return on shareholders' equity, saw a similar trend, reflecting the company's ability to generate profits for its shareholders.
Overall, while Commercial Metals Company has shown varying levels of profitability over the past five years, it is important for stakeholders to assess the reasons behind these fluctuations and consider the company's overall financial performance and strategic direction.