PC Connection Inc (CNXN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 17.96% | 16.84% | 16.06% | 16.17% | 16.00% |
| Operating profit margin | 3.62% | 3.86% | 3.34% | 2.78% | 3.97% |
| Pretax margin | 3.97% | 3.89% | 3.34% | 2.83% | 4.00% |
| Net profit margin | 2.92% | 2.86% | 2.42% | 2.15% | 2.91% |
Over the past five years, PC Connection Inc has shown varying levels of profitability as reflected in its key profitability ratios.
1. Gross Profit Margin:
The gross profit margin, which indicates the percentage of revenue retained after accounting for the cost of goods sold, has shown a generally increasing trend over the period, reaching 17.96% in 2023. This suggests that the company has been able to improve its pricing strategy or manage its direct costs effectively.
2. Operating Profit Margin:
The operating profit margin, representing the percentage of revenue remaining after deducting operating expenses, witnessed fluctuations during this period. In 2023, the operating profit margin decreased slightly to 3.62% compared to the previous year. This may indicate challenges in controlling operating expenses or generating higher operating income.
3. Pre-Tax Margin:
The pre-tax margin, which reveals the percentage of revenue left after accounting for all operating expenses and interest but before taxes, also experienced variability. In 2023, the pre-tax margin increased to 3.97%, indicating a relatively stronger performance in managing costs and generating operating income.
4. Net Profit Margin:
The net profit margin, reflecting the percentage of revenue that translates into profit after all expenses, including taxes, has also fluctuated over the years. In 2023, the net profit margin increased to 2.92%, indicating a better bottom-line performance compared to the previous year.
Overall, while PC Connection Inc has shown improvements in its gross profit margin and net profit margin in 2023, its operating profit margin saw a slight decline. The company may need to focus on cost management and operational efficiency to sustain and enhance its profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.68% | 10.96% | 8.91% | 7.10% | 11.95% |
| Return on assets (ROA) | 7.01% | 8.11% | 6.45% | 5.49% | 8.76% |
| Return on total capital | 12.27% | 15.73% | 14.14% | 11.52% | 18.88% |
| Return on equity (ROE) | 9.90% | 11.64% | 10.24% | 8.76% | 13.75% |
PC Connection Inc's profitability ratios have shown some fluctuations over the past five years.
1. Operating Return on Assets (Operating ROA): This ratio measures the company's operating efficiency in generating profits from its assets. PC Connection Inc's Operating ROA has shown a decreasing trend from 11.95% in 2019 to 8.68% in 2023. This indicates that the company's ability to generate operating income from its assets has declined over the years.
2. Return on Assets (ROA): ROA measures the overall efficiency of the company in generating profits from its total assets. PC Connection Inc's ROA has fluctuated between 5.49% and 8.76% over the past five years. The higher the ROA, the more effectively the company is utilizing its assets to generate profits.
3. Return on Total Capital: This ratio indicates the return generated by the company for all providers of capital, including both debt and equity holders. PC Connection Inc's Return on Total Capital has ranged from 11.52% to 18.88% over the period, showing variations in the company's ability to generate returns for all stakeholders.
4. Return on Equity (ROE): ROE measures the return generated by the company for its equity shareholders. PC Connection Inc's ROE has fluctuated between 8.76% and 13.75% over the past five years. A higher ROE indicates that the company is effectively using shareholders' equity to generate profits.
Overall, PC Connection Inc's profitability ratios show variable trends, with some ratios indicating declining profitability while others showing improvement or stability over the years. Further analysis of the company's financial performance and strategic decisions would be necessary to understand the underlying reasons for these trends.