Cencora Inc. (COR)
Profitability ratios
Return on sales
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 3.37% | 3.42% | 3.48% | 3.24% | 2.73% |
| Operating profit margin | 0.74% | 0.89% | 0.99% | 1.10% | -2.70% |
| Pretax margin | 0.68% | 0.83% | 0.93% | 1.04% | -2.79% |
| Net profit margin | 0.51% | 0.67% | 0.71% | 0.72% | -1.80% |
The profitability ratios of Cencora Inc. for the past five years show a mixed trend. The gross profit margin has seen a gradual decrease from 3.48% in 2022 to 3.37% in 2024, indicating a slight reduction in the company's ability to generate profits after accounting for the cost of goods sold.
The operating profit margin has also experienced a decline over the years, moving from 0.99% in 2022 to 0.74% in 2024. This suggests that the company's profitability from its core operations has weakened.
The pretax margin and net profit margin have followed a similar pattern of decrease, albeit slightly more subdued. The pretax margin decreased from 0.93% in 2022 to 0.68% in 2024, while the net profit margin dropped from 0.71% in 2022 to 0.51% in 2024.
Overall, the declining trend in profitability margins raises concerns about Cencora Inc.'s ability to efficiently manage its costs and generate sustainable profits. It is essential for the company to closely monitor and address the factors contributing to this downward trajectory to ensure long-term financial viability.
Return on investment
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.24% | 3.74% | 4.18% | 4.11% | -11.60% |
| Return on assets (ROA) | 2.25% | 2.79% | 3.00% | 2.69% | -7.70% |
| Return on total capital | 48.80% | 50.14% | 53.53% | 35.63% | -197.56% |
| Return on equity (ROE) | 233.63% | 334.34% | — | 689.46% | — |
Cencora Inc.'s profitability ratios demonstrate a mixed performance over the past five years.
- Operating return on assets (Operating ROA): The trend shows a slight decline from 4.18% in 2022 to 3.24% in 2024. This ratio indicates that Cencora is generating operating profit more efficiently in recent years compared to the significant negative value in 2020, implying improved operational efficiency.
- Return on assets (ROA): The trend in ROA also shows a decline from 3.00% in 2022 to 2.25% in 2024. This ratio measures the overall profitability of the company. While the positive values indicate that Cencora is generating profit from its assets, the declining trend suggests a need to improve overall asset utilization for higher profitability.
- Return on total capital: The return on total capital has shown fluctuations, with a peak of 53.53% in 2022 and a dip to 48.80% in 2024. This ratio indicates how efficiently the company is generating profits from both debt and equity capital employed. The positive values signify high returns but the decreasing trend calls for a closer look at capital allocation strategies.
- Return on equity (ROE): The ROE values are significantly high, with notable fluctuations. ROE indicates the return generated for the shareholders' equity investment. The absence of data for 2021 and the immense fluctuation suggest potential irregularities in the company's capital structure or possibly the presence of exceptional one-time events impacting profitability.
Overall, Cencora Inc. should focus on maintaining or improving its operating and overall profitability ratios to ensure sustainable growth and efficient utilization of its assets and capital. Additionally, addressing the fluctuations in ROE and capital returns can help in providing a clearer picture of shareholder value creation over time.