Emerson Electric Company (EMR)
Profitability ratios
Return on sales
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 50.96% | 49.14% | 32.14% | 41.40% | 41.76% |
| Operating profit margin | 5.97% | 12.45% | 13.68% | 12.48% | 11.50% |
| Pretax margin | 13.67% | 91.42% | 19.26% | 14.50% | 13.76% |
| Net profit margin | 11.29% | 87.46% | 16.47% | 12.61% | 11.71% |
Emerson Electric Company's profitability ratios have shown fluctuations over the past five years. Starting with the gross profit margin, there has been a general upward trend from 32.14% in 2022 to 50.96% in 2024, indicating an improvement in the company's ability to generate profit from its core operations.
The operating profit margin has displayed some variability, with a peak of 13.68% in 2022 followed by a decline in subsequent years. However, the margin rebounded in 2024 to 5.97%, suggesting that Emerson Electric has been able to better manage its operating expenses in the most recent period.
The pretax margin experienced a significant spike in 2023, reaching 91.42%, driven by extraordinary items or one-time gains. This anomaly heavily influenced the overall profitability ratios for that year. In contrast, the net profit margin, which represents the company's bottom line profitability after all expenses are deducted, has been relatively stable around the 10-12% range over the past five years.
Overall, Emerson Electric Company has shown improvements in its gross profit margin and operating profit margin in recent years, demonstrating an enhanced ability to generate profits from its operations. However, the variability in the pretax margin highlights the impact of non-operating items on the company's profitability ratios. It is important for investors and analysts to consider the underlying factors driving these ratios to gain a more comprehensive understanding of Emerson Electric's financial performance.
Return on investment
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.35% | 4.40% | 7.53% | 9.22% | 8.44% |
| Return on assets (ROA) | 4.45% | 30.92% | 9.06% | 9.32% | 8.59% |
| Return on total capital | 3.62% | 6.65% | 14.42% | 17.84% | 13.11% |
| Return on equity (ROE) | 9.10% | 63.89% | 31.18% | 23.30% | 23.38% |
Emerson Electric Company's profitability ratios have shown variability over the past five years. The Operating Return on Assets (Operating ROA) has displayed a declining trend, decreasing from 9.22% in 2021 to 2.35% in 2024. This indicates a decrease in the company's ability to generate profits from its assets before accounting for interest and taxes.
Return on Assets (ROA) also experienced significant fluctuations, with a substantial spike to 30.92% in 2023, followed by a decrease to 4.45% in 2024. This could be attributed to changes in the company's asset utilization and efficiency in generating profits relative to its total assets.
Return on Total Capital decreased from 17.84% in 2021 to 3.62% in 2024, indicating a decline in the company's ability to generate profits from both equity and debt capital employed in its operations.
Return on Equity (ROE) exhibited a similar pattern, with a peak of 63.89% in 2023 followed by a decrease to 9.10% in 2024. This suggests a decreasing trend in the company's ability to generate profits from shareholders' equity.
Overall, the profitability ratios of Emerson Electric Company have shown fluctuations and a general decline in recent years, indicating potential challenges in efficiently utilizing assets and capital to generate profits and returns for its shareholders.