Dollar General Corporation (DG)
Profitability ratios
Return on sales
| Jan 31, 2025 | Feb 2, 2024 | Jan 31, 2024 | Feb 3, 2023 | Jan 31, 2023 | |
|---|---|---|---|---|---|
| Gross profit margin | 29.59% | 30.55% | 30.29% | 31.41% | 31.23% |
| Operating profit margin | 4.22% | 6.38% | 6.32% | 8.84% | 8.79% |
| Pretax margin | 3.55% | 5.52% | 5.48% | 8.28% | 8.24% |
| Net profit margin | 2.77% | 4.33% | 4.29% | 6.42% | 6.38% |
Based on the provided data, Dollar General Corporation's profitability ratios have shown a declining trend over the years.
1. Gross Profit Margin: The company's gross profit margin decreased from 31.23% in January 31, 2023, to 29.59% in January 31, 2025. This indicates a decrease in the percentage of revenue retained as gross profit after accounting for the cost of goods sold.
2. Operating Profit Margin: Dollar General's operating profit margin also experienced a decline, dropping from 8.79% in January 31, 2023, to 4.22% in January 31, 2025. This ratio reflects the company's ability to generate profit from its core operations after considering operating expenses.
3. Pretax Margin: The pretax margin decreased from 8.24% in January 31, 2023, to 3.55% in January 31, 2025. This ratio indicates the percentage of revenue left after accounting for all operating expenses and before income taxes.
4. Net Profit Margin: The net profit margin, which reflects the company's bottom line profitability, declined from 6.38% in January 31, 2023, to 2.77% in January 31, 2025. This indicates a decrease in the percentage of revenue retained as net income after accounting for all expenses, including taxes.
Overall, the declining trend in Dollar General's profitability ratios suggests challenges in maintaining profitability efficiency over the years. This could be attributed to various factors such as increasing costs, pricing pressures, or changes in consumer preferences impacting the company's financial performance.
Return on investment
| Jan 31, 2025 | Feb 2, 2024 | Jan 31, 2024 | Feb 3, 2023 | Jan 31, 2023 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.51% | 7.94% | 7.94% | 11.44% | 11.44% |
| Return on assets (ROA) | 3.61% | 5.39% | 5.39% | 8.31% | 8.31% |
| Return on total capital | 23.12% | 36.25% | 36.25% | 60.05% | 60.05% |
| Return on equity (ROE) | 15.18% | 24.61% | 24.61% | 43.60% | 43.60% |
Based on the provided data for Dollar General Corporation, we can conduct a comprehensive analysis of the profitability ratios:
1. Operating Return on Assets (Operating ROA):
- January 31, 2023: 11.44%
- February 3, 2023: 11.44%
- January 31, 2024: 7.94%
- February 2, 2024: 7.94%
- January 31, 2025: 5.51%
The Operating ROA measures how efficiently a company generates operating profits from its assets. Dollar General's Operating ROA has shown a declining trend over the years, indicating a decrease in operating profitability relative to its assets.
2. Return on Assets (ROA):
- January 31, 2023: 8.31%
- February 3, 2023: 8.31%
- January 31, 2024: 5.39%
- February 2, 2024: 5.39%
- January 31, 2025: 3.61%
ROA reflects the company's overall profitability in generating earnings from its assets. Dollar General's ROA has also decreased over the years, illustrating a diminishing ability to generate returns on its total assets.
3. Return on Total Capital:
- January 31, 2023: 60.05%
- February 3, 2023: 60.05%
- January 31, 2024: 36.25%
- February 2, 2024: 36.25%
- January 31, 2025: 23.12%
This ratio shows the efficiency of the company in generating returns from both equity and debt capital. Dollar General's Return on Total Capital has experienced a significant decline, indicating a lower return on the total invested capital over the years.
4. Return on Equity (ROE):
- January 31, 2023: 43.60%
- February 3, 2023: 43.60%
- January 31, 2024: 24.61%
- February 2, 2024: 24.61%
- January 31, 2025: 15.18%
ROE measures the return generated on shareholders' equity. Dollar General's ROE has also shown a decreasing trend, implying that the company's profitability in relation to shareholders' equity has been diminishing.
In summary, the profitability ratios for Dollar General Corporation indicate a general decrease in efficiency and profitability over the years, as reflected in the declining trends of the Operating ROA, ROA, Return on Total Capital, and ROE ratios. This analysis suggests that Dollar General may be facing challenges in optimizing its asset utilization and generating satisfactory returns for its investors.