Equifax Inc (EFX)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 55.67% | 55.65% | 57.49% | 59.77% | 57.91% |
| Operating profit margin | 18.34% | 17.73% | 20.62% | 23.11% | 16.39% |
| Pretax margin | 14.27% | 13.63% | 18.15% | 19.28% | 16.60% |
| Net profit margin | 10.63% | 10.36% | 13.59% | 15.11% | 12.60% |
Equifax Inc's profitability ratios show fluctuations over the years. The gross profit margin has been relatively steady, ranging from 55.65% to 59.77%. This indicates the company's ability to generate profit from its core business activities after accounting for cost of goods sold.
The operating profit margin saw significant improvement from 16.39% in 2020 to 23.11% in 2021, before stabilizing around 18-20% in the following years. This metric reveals the efficiency of Equifax's operations in generating operating profits.
The pretax margin peaked at 19.28% in 2021 but slightly declined in subsequent years, indicating the company's ability to manage operating expenses and generate profits before accounting for taxes.
The net profit margin, which represents the company's bottom line profitability, experienced a similar trend, peaking at 15.11% in 2021 and then dropping to around 10-12% in the later years. This suggests that Equifax's profitability after all expenses, including taxes, has decreased over time.
Overall, Equifax's profitability ratios paint a picture of a company that has shown mixed performance in generating profits over the analyzed period, with some improvements in operating efficiency but challenges in maintaining net profitability.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.86% | 7.60% | 9.14% | 10.31% | 7.04% |
| Return on assets (ROA) | 5.14% | 4.44% | 6.03% | 6.74% | 5.41% |
| Return on total capital | 21.67% | 21.16% | 28.12% | 30.54% | 26.10% |
| Return on equity (ROE) | 12.59% | 12.03% | 17.60% | 20.76% | 16.42% |
Based on the profitability ratios provided for Equifax Inc for the years 2020 to 2024:
1. Operating Return on Assets (Operating ROA):
- The Operating ROA increased from 7.04% in 2020 to 10.31% in 2021, indicating an improvement in the company's ability to generate operating profit from its assets.
- Although there was a slight decrease in 2022 to 9.14%, the ratio remained relatively stable above 9% over the following years, with values of 7.60% and 8.86% in 2023 and 2024 respectively.
2. Return on Assets (ROA):
- The ROA also showed an upward trend from 5.41% in 2020 to 6.74% in 2021, suggesting an increase in overall profitability relative to the total assets employed.
- However, the ratio declined to 6.03% in 2022 and further to 4.44% in 2023 before improving slightly to 5.14% in 2024.
3. Return on Total Capital:
- The Return on Total Capital increased significantly from 26.10% in 2020 to 30.54% in 2021, indicating a high return generated on the total capital employed by the company.
- Subsequently, the ratio declined to 28.12% in 2022 and further to 21.16% in 2023 and 21.67% in 2024, showing a decreasing trend in the return on total capital over the years.
4. Return on Equity (ROE):
- The Return on Equity exhibited a similar pattern to the ROA ratios, with an increase from 16.42% in 2020 to 20.76% in 2021, reflecting an improvement in the return to equity holders.
- However, the ratio declined to 17.60% in 2022 and further to 12.03% in 2023 before stabilizing at 12.59% in 2024, indicating fluctuations in the return on equity.
Overall, Equifax Inc showed positive profitability metrics in the earlier years, followed by some volatility in the ratios in the later years. The company should focus on sustaining and improving its profitability ratios to ensure long-term sustainable growth and value creation for its shareholders.