Donaldson Company Inc (DCI)
Profitability ratios
Return on sales
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 34.85% | 35.54% | 33.83% | 32.28% | 34.05% |
| Operating profit margin | 15.10% | 15.17% | 14.00% | 13.41% | 13.48% |
| Pretax margin | 13.34% | 14.93% | 13.66% | 13.26% | 13.35% |
| Net profit margin | 9.94% | 11.54% | 10.46% | 10.06% | 10.05% |
The profitability ratios of Donaldson Company Inc. demonstrate a generally stable and gradually improving trend over the observed period from July 31, 2021, to July 31, 2024, with some fluctuations noted in 2025.
The gross profit margin, which reflects the efficiency of production and the ability to generate profit from sales after cost of goods sold, exhibits slight variability. It decreased marginally from 34.05% in 2021 to 32.28% in 2022, indicating a potential pressure on production costs or pricing strategies. Subsequently, it recovered and increased to 33.83% in 2023 and further rose to 35.54% in 2024, suggesting improved cost management or favorable pricing conditions. However, by 2025, the gross margin slightly declined to 34.85%, still remaining near historical levels.
Operating profit margin, indicative of operating efficiency, remained relatively stable in the early years, hovering around 13.4% to 13.5% in 2021 and 2022, and then increased to 14.00% in 2023. The margin improved further to 15.17% in 2024, implying enhanced operational efficiency or better control over operating expenses. In 2025, the operating margin experienced a slight contraction to 15.10%, but it continued to reflect a healthy profitability level above prior years.
Pre-tax margin ratios followed a similar pattern, starting at 13.35% in 2021, decreasing marginally to 13.26% in 2022, then rising to 13.66% in 2023. The upward trend continued significantly in 2024 to 14.93%, before decreasing sharply to 13.34% in 2025. This variation may be associated with changes in interest expenses, other income or expenses, or tax strategies impacting pre-tax profitability.
The net profit margin, which measures the company's bottom-line profitability after all expenses, was relatively stable around 10% in 2021 and 2022. It increased modestly to 10.46% in 2023 and further improved to 11.54% in 2024, reflecting overall increases in net income relative to sales. However, a decline to 9.94% occurred in 2025, which could be partially attributed to increased tax expenses, non-operating charges, or other factors impacting net income.
Overall, Donaldson Company's profitability ratios demonstrate resilience, with recent years showing growth in gross and operating margins, as well as net income, despite some variability in 2025. The trend suggests effective management of costs and operational efficiencies, with some fluctuations possibly driven by broader economic or company-specific factors impacting profitability at the net and pre-tax levels.
Return on investment
| Jul 31, 2025 | Jul 31, 2024 | Jul 31, 2023 | Jul 31, 2022 | Jul 31, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 18.72% | 18.67% | 17.33% | 17.06% | 16.03% |
| Return on assets (ROA) | 12.33% | 14.21% | 12.95% | 12.80% | 11.95% |
| Return on total capital | 35.53% | 37.38% | 36.94% | 40.00% | 34.65% |
| Return on equity (ROE) | 25.25% | 27.80% | 27.17% | 29.37% | 25.23% |
The profitability ratios for Donaldson Company Inc demonstrate a generally positive trend over the analyzed period from July 31, 2021, to July 31, 2025.
The Operating Return on Assets (Operating ROA) has shown consistent growth, increasing from 16.03% in 2021 to 18.67% in 2024, with a slight rise to 18.72% in 2025. This indicates improved operational efficiency and profitability before considering the impact of financial leverage and taxes.
The Return on Assets (ROA), which accounts for all expenses including financing costs, has also exhibited upward movement, rising from 11.95% in 2021 to 14.21% in 2024 before a moderate decline to 12.33% in 2025. This suggests that while core operations are becoming more efficient, the effects of financial structure or other factors might be influencing overall asset profitability in the later period.
Return on total capital has maintained a high level throughout the period, fluctuating slightly but remaining within a strong range: rising from 34.65% in 2021 to a peak of 40.00% in 2022, then stabilizing around mid-30s, with a slight decrease to 35.53% in 2025. This indicates robust returns generated relative to the combined debt and equity financing used by the company.
Return on equity (ROE) exhibits a similar pattern, increasing from 25.23% in 2021 to a high of 29.37% in 2022, followed by a modest decline to 27.17% in 2023 and remaining relatively stable around 27.80% in 2024 before decreasing to 25.25% in 2025. The fluctuations reflect periods of strong internal profitability, with some moderation towards the end of the period.
Overall, the analysis indicates that Donaldson Company Inc has experienced improving operational profitability and efficient asset utilization over most of the period, with some short-term fluctuations in returns on assets and equity. The company’s ability to consistently generate high returns on total capital and maintain positive profitability ratios suggests a solid financial performance with a generally favorable outlook.