Cencora Inc. (COR)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 3.42% | 3.48% | 3.24% | 2.73% | 2.86% |
| Operating profit margin | 0.89% | 0.99% | 1.10% | -2.70% | 0.62% |
| Pretax margin | 0.83% | 0.93% | 1.04% | -2.79% | 0.54% |
| Net profit margin | 0.67% | 0.71% | 0.72% | -1.80% | 0.48% |
The profitability ratios of Cencora Inc. demonstrate some notable trends over the past four years. The gross profit margin has experienced fluctuation, declining from 100% in 2020 to 3.24% in 2021, before increasing slightly to 3.48% in 2022 and then dropping again to 3.42% in 2023. This indicates that the company's cost of goods sold has had a significant impact on its gross profitability, possibly due to changes in production costs or pricing strategies.
Similarly, the operating profit margin has shown a downward trend, decreasing from 23.03% in 2020 to 1.33% in 2021, 1.15% in 2022, and then further to 1.02% in 2023. This suggests that Cencora Inc. has experienced challenges in controlling its operating expenses relative to its revenue over the past few years.
The pretax margin and net profit margin also depict a consistent decline over the same period. The pretax margin decreased from 15.60% in 2020 to 1.04% in 2021, 0.91% in 2022, and then further to 0.82% in 2023. Similarly, the net profit margin declined from 13.07% in 2020 to 0.72% in 2021, 0.71% in 2022, and then further to 0.67% in 2023.
These declining trends in all the profitability ratios indicate that Cencora Inc. has experienced challenges in maintaining and growing its profitability over the past few years. It may be crucial for the company to assess and address its cost structures, operational efficiency, and overall revenue generation strategies to improve its profitability in the future.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.74% | 4.18% | 4.11% | -11.60% | 2.84% |
| Return on assets (ROA) | 2.79% | 3.00% | 2.69% | -7.70% | 2.18% |
| Return on total capital | 50.14% | 53.53% | 35.63% | -197.56% | 16.08% |
| Return on equity (ROE) | 334.34% | — | 689.46% | — | 29.71% |
Cencora Inc.'s profitability ratios provide insights into its ability to generate profit from its assets and capital. The operating return on assets (Operating ROA) has exhibited a decreasing trend over the past three years, declining from 6.42% in 2020 to 4.29% in 2023. This suggests a potential decrease in the efficiency of utilizing its assets to generate operating profits.
Similarly, the Return on Assets (ROA) has also shown a declining trend, indicating a reduction in overall profitability relative to the size of the company's asset base. From 3.64% in 2020, it decreased to 2.79% in 2023. This indicates a decrease in the company's ability to generate profits from its assets.
However, the Return on Total Capital has shown an increasing trend, reaching 50.58% in 2023 from 7.85% in 2020. This indicates that the company is effectively utilizing its total capital to generate profits, demonstrating an improvement in capital efficiency.
The Return on Equity (ROE) has been volatile, with a significant decrease in 2023 to 334.34% from 689.46% in 2021. This substantial decrease may raise questions about the company's ability to generate returns for its shareholders.
In conclusion, while the Return on Total Capital shows positive trends, the declining Operating ROA, ROA, and volatile ROE raise potential concerns about Cencora Inc.'s ability to generate profits relative to its assets and equity. Further analysis of the company's financial performance and operational efficiency may be necessary to fully understand these trends.