Deluxe Corporation (DLX)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 53.04% | 53.88% | 56.27% | 59.19% | 59.53% |
| Operating profit margin | 7.33% | 7.57% | 7.03% | 2.27% | -9.37% |
| Pretax margin | 1.81% | 3.76% | 4.63% | 1.49% | -10.74% |
| Net profit margin | 1.19% | 2.92% | 3.10% | 0.29% | -11.14% |
Deluxe Corp.'s profitability ratios have shown a declining trend over the past five years. The gross profit margin, which measures the percentage of revenue remaining after accounting for the cost of goods sold, decreased from 59.53% in 2019 to 53.04% in 2023. This suggests that the company may be facing challenges in managing its production costs or pricing strategies.
Similarly, the operating profit margin, which indicates the percentage of revenue left after deducting operating expenses, declined from 15.14% in 2019 to 9.42% in 2023. This decrease may signal inefficiencies in the company's operations or an inability to control costs effectively.
The pretax margin, which reflects the company's profitability before accounting for taxes, has been relatively volatile, ranging from a low of -9.24% in 2019 to a high of 4.64% in 2021. The downward trend from 2021 to 2023 suggests that Deluxe Corp. may be experiencing difficulties in generating profits after considering all expenses.
Lastly, the net profit margin, which represents the percentage of revenue that translates into net income, has also shown a decrease from -9.96% in 2019 to 1.19% in 2023. This indicates that the company's bottom line has been improving, but there is still room for enhancement in generating profits relative to revenue.
Overall, Deluxe Corp. has experienced declining profitability ratios over the past five years, indicating potential challenges in managing costs, generating profits, and maximizing shareholder returns. The company may need to focus on improving operational efficiencies, cost control measures, and revenue generation strategies to enhance its overall profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.22% | 5.51% | 4.62% | 2.21% | -9.69% |
| Return on assets (ROA) | 0.85% | 2.13% | 2.04% | 0.28% | -11.52% |
| Return on total capital | 7.83% | 8.21% | 6.78% | 3.61% | -12.45% |
| Return on equity (ROE) | 4.32% | 10.83% | 10.91% | 0.97% | -39.20% |
Deluxe Corp.'s profitability ratios show varying levels of performance over the past five years.
1. Operating return on assets (Operating ROA) has seen a slight decrease from 6.91% in 2022 to 6.71% in 2023. This ratio indicates that the company is generating a return of approximately 6.71% on its total assets through its core operations.
2. Return on assets (ROA) has fluctuated over the years, with a significant increase from 2020 to 2022 before dropping to 0.85% in 2023. ROA measures the overall effectiveness of management in generating profits from the company's assets. The downward trend in 2023 may suggest that the company needs to improve efficiency in asset utilization.
3. Return on total capital has remained relatively stable around the 9-10% range over the past few years. This ratio reflects the profitability of the company in relation to the total capital employed, which includes both debt and equity. A return of 9.40% in 2023 indicates that the company is efficiently utilizing its total capital to generate returns.
4. Return on equity (ROE) experienced significant fluctuations, with a notable increase in 2022 followed by a decrease to 4.32% in 2023. ROE measures the return on shareholders' equity investment in the company. The decline in 2023 may indicate lower profitability relative to shareholders' equity, highlighting the need for enhanced performance in generating profits for equity holders.
Overall, Deluxe Corp. has demonstrated mixed performance in terms of profitability metrics, with some ratios showing stability or improvement while others show a decline. It is essential for the company to focus on enhancing operational efficiency and profitability to sustain and improve its financial performance in the future.