Now Inc (DNOW)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 22.12% | 22.50% | 20.83% | -2.35% | 14.41% |
| Operating profit margin | 6.04% | 6.14% | 0.55% | -25.93% | -2.81% |
| Pretax margin | 5.91% | 6.47% | 0.74% | -26.54% | -3.15% |
| Net profit margin | 10.65% | 6.00% | 0.31% | -26.36% | -3.29% |
Looking at NOW Inc's profitability ratios over the past five years, we can observe the following trends:
1. Gross Profit Margin: The gross profit margin has shown some fluctuations but generally remained above 20% in the last five years. There was a slight decrease in 2021 compared to the previous years, but it rebounded in 2022 and 2023, indicating an efficient management of the cost of goods sold.
2. Operating Profit Margin: The operating profit margin also fluctuated over the period, with a notable improvement in 2021 and 2022 compared to the negative margin in 2020. This suggests that the company was able to control its operating expenses more effectively and generate operating income.
3. Pre-tax Margin: The pre-tax margin improved consistently from 2020 onwards, with positive figures in 2023. This indicates that NOW Inc managed to reduce its pre-tax losses and generate pre-tax income in the more recent years.
4. Net Profit Margin: The net profit margin showed significant improvement from negative figures in 2020 and 2019 to positive margins in 2021, 2022, and 2023. This suggests that the company was able to turn its net losses into net profits by better managing its expenses and increasing revenue.
Overall, NOW Inc's profitability ratios have shown improvement over the past five years, indicating better control over costs and operational efficiency, which has translated into increased profitability for the company.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.16% | 9.92% | 0.82% | -41.67% | -5.22% |
| Return on assets (ROA) | 16.15% | 9.70% | 0.45% | -42.36% | -6.10% |
| Return on total capital | 13.21% | 15.56% | 1.27% | -60.09% | -7.26% |
| Return on equity (ROE) | 23.30% | 15.20% | 0.70% | -61.09% | -8.48% |
NOW Inc's profitability ratios indicate a mixed performance over the past five years. The operating return on assets (Operating ROA) ranged from -9.82% in 2020 to a high of 10.68% in 2022, with a notable decrease to 1.45% in 2021 before rebounding to 9.16% in 2023. Return on assets (ROA) also showed variability, with a significant negative ROA of -42.36% in 2020, improving to 16.15% in 2023.
Return on total capital ranged from a negative 14.16% in 2020 to a high of 16.75% in 2022. The return on equity (ROE) varied significantly, with a low of -61.09% in 2020, a slight improvement to -8.48% in 2019, and a notable increase to 23.30% in 2023.
Overall, while NOW Inc's profitability ratios have shown fluctuations, there seems to have been an improvement in recent years, especially in 2023. The company may have taken steps to enhance profitability, but further analysis of the underlying factors driving these changes is necessary to fully assess the sustainability of this improvement.