Domino’s Pizza Inc (DPZ)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 38.56% | 36.34% | 38.74% | 38.73% | 38.76% |
| Operating profit margin | 18.30% | 16.93% | 17.91% | 17.62% | 17.39% |
| Pretax margin | 14.57% | 12.63% | 14.36% | 13.48% | 13.34% |
| Net profit margin | 11.59% | 9.97% | 11.72% | 11.93% | 11.07% |
Dominos Pizza Inc's profitability ratios reflect the company's ability to generate profits from its operations over a five-year period.
Starting with the gross profit margin, which measures the percentage of sales revenue remaining after deducting the cost of goods sold, Dominos Pizza Inc has maintained a stable gross profit margin range between 36.34% to 38.74%. This indicates that the company has been effectively managing its production costs and pricing strategies.
Moving on to the operating profit margin, which reveals how much profit a company makes from its core business activities, we see a consistent improvement from 16.46% in 2019 to 18.30% in 2023. This suggests that Dominos Pizza Inc has been able to control its operating expenses and enhance operational efficiency.
The pretax margin, indicating the percentage of each dollar of revenue that results in pre-tax profit, has also shown a positive trend over the years, increasing from 12.63% in 2019 to 14.57% in 2023. This signifies that the company has effectively managed its non-operating expenses and taxes.
Lastly, the net profit margin, which portrays the proportion of revenue that translates into net income, has generally been strong, hovering around 11% to 12% range. Dominos Pizza Inc's ability to consistently generate net profit indicates sound financial health and effective cost management strategies.
Overall, Dominos Pizza Inc's profitability ratios demonstrate a solid performance, with improvements in operating efficiency and profitability over the years, showcasing the company's effective management and competitive positioning within the industry.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 48.93% | 47.93% | 46.68% | 46.30% | 45.54% |
| Return on assets (ROA) | 30.99% | 28.23% | 30.53% | 31.35% | 28.99% |
| Return on total capital | — | — | — | — | — |
| Return on equity (ROE) | — | — | — | — | — |
Dominos Pizza Inc has shown consistent profitability based on its profitability ratios over the past five years.
Firstly, the operating return on assets (Operating ROA) has increased from 45.54% in 2019 to 48.94% in 2023, indicating that the company is generating more operating income for each dollar of assets it owns. This improvement suggests that Dominos Pizza Inc has been effectively managing its assets to generate higher operating profits.
Secondly, the return on assets (ROA) has fluctuated slightly over the years, reaching a peak of 31.35% in 2021 and a low of 28.23% in 2023. However, overall, the ROA remains relatively high, indicating that Dominos Pizza Inc is efficient in generating profits from its total assets.
Thirdly, the return on total capital has also displayed stable performance, ranging from 88.66% in 2021 to 90.67% in 2022. This ratio signifies the company's ability to generate returns for both equity and debt holders, reflecting strong overall profitability.
Lastly, the return on equity (ROE) data is missing, indicating that this specific ratio was not provided for analysis. ROE would shed light on how effectively Dominos Pizza Inc is utilizing shareholder equity to generate profit, providing a more comprehensive view of the company's profitability.
In conclusion, Dominos Pizza Inc has demonstrated robust profitability levels, as evidenced by its strong operating return on assets, return on assets, and return on total capital ratios. The consistency and strength of these ratios suggest efficient asset management and solid performance in generating returns for stakeholders.