Digi International Inc (DGII)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 56.69% | 55.71% | 54.00% | 51.55% | 46.83% |
| Operating profit margin | 11.26% | 9.84% | 3.41% | 4.05% | 3.96% |
| Pretax margin | 5.60% | 4.80% | 2.92% | 2.67% | 4.38% |
| Net profit margin | 5.57% | 4.99% | 3.36% | 3.01% | 3.92% |
Sure, let's analyze the profitability ratios of Digi International, Inc. using the provided data.
1. Gross Profit Margin:
The gross profit margin measures the percentage of each sales dollar that remains after deducting the cost of goods sold. Digi International's gross profit margin has shown a consistent upward trend over the past five years, increasing from 47.99% in 2019 to 57.58% in 2023. This improvement indicates the company's ability to effectively control its production and manufacturing costs, as well as potentially command higher prices for its products.
2. Operating Profit Margin:
The operating profit margin reflects the percentage of sales that is left after deducting both the cost of goods sold and operating expenses. Digi International's operating profit margin has also exhibited a positive trend, increasing from 3.93% in 2019 to 11.26% in 2023. This demonstrates the company's success in managing its operating expenses and generating stronger operating profits relative to its sales.
3. Pretax Margin:
The pretax margin indicates the percentage of sales that remains after deducting all operating expenses and non-operating expenses but before deducting taxes. Digi International's pretax margin has shown a steady improvement from 2.67% in 2020 to 5.60% in 2023. This suggests that the company has been able to generate more income relative to its total sales, highlighting improved operational efficiency.
4. Net Profit Margin:
The net profit margin measures the percentage of sales that remains as net income after deducting all expenses, including taxes. Digi International's net profit margin has also demonstrated consistent growth, increasing from 3.92% in 2019 to 5.57% in 2023. This reflects the company's ability to control non-operating expenses and taxes, resulting in greater profitability and higher net income per dollar of sales.
Overall, the trend in Digi International's profitability ratios indicates an improving financial performance over the past five years. The increasing margins suggest that the company has been effectively managing its costs, operating efficiently, and earning stronger profits relative to its sales. These trends are generally positive indicators of Digi International's operational and financial strength.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.00% | 4.48% | 1.70% | 2.14% | 2.53% |
| Return on assets (ROA) | 2.96% | 2.27% | 1.67% | 1.59% | 2.50% |
| Return on total capital | 6.88% | 5.29% | 2.00% | 2.57% | 3.22% |
| Return on equity (ROE) | 4.58% | 3.86% | 2.19% | 2.26% | 2.85% |
Certainly, let's analyze the profitability ratios of Digi International, Inc. based on the provided data.
1. Operating Return on Assets (Operating ROA):
The operating return on assets measures the company's operating income generated per dollar of assets. Digi International, Inc.'s operating ROA has shown a positive trend over the past five years, increasing from 2.50% in 2019 to 6.00% in 2023, indicating an improvement in the company's ability to generate operating income from its assets.
2. Return on Assets (ROA):
The return on assets reflects the company's overall profitability relative to the total assets. Digi International, Inc.'s ROA has also exhibited a generally positive trend, with a notable increase from 1.59% in 2020 to 2.96% in 2023. This indicates that the company has been more efficient in generating profits from its assets over the years.
3. Return on Total Capital:
The return on total capital measures the company's ability to generate profits from the total capital employed, including both equity and debt. Digi International, Inc.'s return on total capital has shown a consistent upward trend, reaching 6.73% in 2023, reflecting an improvement in the company's efficiency in utilizing its total capital to generate profits.
4. Return on Equity (ROE):
The return on equity indicates the company's profitability in relation to the shareholders' equity. Digi International, Inc.'s ROE has also experienced a positive trajectory, increasing from 2.85% in 2019 to 4.58% in 2023, demonstrating an enhancement in the company's ability to generate profits from shareholder investments.
In summary, Digi International, Inc. has demonstrated a positive trend in its profitability ratios over the past five years, indicating improved efficiency in generating profits relative to its assets, total capital, and equity. These trends suggest that the company has been able to enhance its overall profitability and effectively utilize its resources to create value for its stakeholders.