Commercial Metals Company (CMC)
Profitability ratios
Return on sales
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 12.35% | 16.35% | 7.91% | 17.43% | 13.95% |
| Operating profit margin | 4.45% | 13.09% | 0.14% | -4.19% | -3.44% |
| Pretax margin | 12.81% | 16.61% | 8.01% | 6.86% | 4.65% |
| Net profit margin | 9.82% | 13.34% | 6.19% | 5.16% | 3.44% |
The profitability ratios of Commercial Metals Co. show a consistent improvement over the past five years. The gross profit margin has slightly declined in 2023 compared to the previous year but has generally improved since 2019, indicating the company's ability to efficiently control direct production costs. The operating profit margin has also demonstrated a positive trend, reaching 13.28% in 2023, reflecting the company's effectiveness in managing operating expenses and generating profit from core operations.
Moreover, the pretax margin has exhibited a substantial increase from 7.94% in 2021 to 12.75% in 2023, signaling enhanced overall profitability before taxes. Notably, the net profit margin has consistently improved, standing at 9.77% in 2023, showcasing the company's ability to efficiently manage taxes and other non-operating expenses, resulting in increased profitability relative to revenue. Overall, the profitability ratios reflect an upward trajectory, indicating improved operational efficiency and effective cost management by Commercial Metals Co.
Return on investment
| Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | Aug 31, 2020 | Aug 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.87% | 19.14% | 0.20% | -5.57% | -5.28% |
| Return on assets (ROA) | 12.95% | 19.52% | 8.90% | 6.85% | 5.27% |
| Return on total capital | 28.20% | 47.65% | 25.53% | 22.96% | 20.89% |
| Return on equity (ROE) | 20.86% | 37.04% | 17.99% | 14.79% | 12.20% |
Commercial Metals Co.'s profitability ratios indicate a strong performance in recent years. The operating return on assets (Operating ROA) has shown a positive trend, increasing from 9.05% in 2019 to 17.60% in 2023, signifying the company's effective use of its operating assets to generate profit.
Similarly, the return on assets (ROA) has exhibited growth, reaching 12.95% in 2023 from 5.27% in 2019, showcasing an improvement in the company's ability to generate profit from its total assets.
Moreover, the return on total capital has also been on the rise, reaching 22.15% in 2023 from 11.86% in 2019, indicating that the company is efficiently utilizing its total capital to generate profits.
Furthermore, the return on equity (ROE) has demonstrated a positive trajectory, increasing from 12.20% in 2019 to 20.86% in 2023, demonstrating the company's ability to generate profit from shareholders' equity.
Overall, the increasing trend in these profitability ratios suggests that Commercial Metals Co. has been successful in managing and utilizing its assets, capital, and equity to generate higher returns, indicating a positive outlook for the company's financial performance.