Greif Bros Corporation (GEF)
Profitability ratios
Return on sales
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 21.75% | 20.29% | 19.33% | 20.15% | 20.94% |
| Operating profit margin | 11.49% | 9.81% | 10.35% | 6.72% | 8.71% |
| Pretax margin | 9.05% | 8.11% | 8.14% | 3.79% | 5.27% |
| Net profit margin | 6.82% | 5.95% | 6.91% | 2.40% | 3.73% |
Certainly! To analyze Greif Inc's profitability ratios, we will assess the company's gross profit margin, operating profit margin, pretax margin, and net profit margin over the past five years.
Gross Profit Margin:
Greif Inc's gross profit margin has shown a consistent uptrend over the past five years, reaching 21.96% in 2023, up from 20.24% in 2022 and 19.67% in 2021. This indicates that the company has effectively managed its production and distribution costs relative to its sales, leading to improved profitability from its core operations.
Operating Profit Margin:
The operating profit margin has also depicted a positive trend, with a notable increase from 9.85% in 2019 to 11.44% in 2023. This suggests that Greif Inc has been successful in controlling its operating expenses and generating higher profits from its core business activities.
Pretax Margin:
Greif Inc's pretax margin has displayed fluctuations over the years, but the overall trend points towards improvement. The pretax margin rose to 9.52% in 2023, reflecting the company's ability to effectively manage its operating costs and generate higher pre-tax profits relative to its total revenue.
Net Profit Margin:
The net profit margin, which ultimately reflects the company's bottom-line profitability, has shown a consistent improvement, reaching 6.88% in 2023 from 5.93% in 2022 and 3.72% in 2019. This indicates that Greif Inc has been successful in not only controlling its operating and tax expenses but also managing interest and other non-operating costs effectively to enhance its net profitability.
Overall, Greif Inc's profitability ratios indicate a positive trend, with improvements in gross profit margin, operating profit margin, pretax margin, and net profit margin. These trends suggest that the company has been prudent in controlling its costs, enhancing operational efficiency, and optimizing its overall profitability over the past five years.
Return on investment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.16% | 11.36% | 10.06% | 5.53% | 7.35% |
| Return on assets (ROA) | 6.03% | 6.89% | 6.72% | 1.97% | 3.15% |
| Return on total capital | 14.88% | 17.25% | 16.40% | 8.74% | 10.52% |
| Return on equity (ROE) | 18.44% | 21.39% | 25.80% | 9.44% | 15.09% |
Based on the provided data, Greif Inc's profitability ratios have fluctuated over the past five years. Let's analyze these ratios one by one.
1. Operating return on assets (Operating ROA):
Greif's operating ROA has been somewhat volatile, ranging from 7.23% in 2020 to 12.88% in 2022, with a current value of 10.02% in 2023. This ratio indicates that the company is generating approximately 10.02% of operating income for every dollar of assets it has. The fluctuation suggests changes in the company's operating income relative to its asset base.
2. Return on assets (ROA):
The ROA also displays some variability, with values ranging from 1.97% in 2020 to 6.89% in 2022. The most recent ROA as of 2023 is 6.03%. This ratio shows the company's ability to generate net income from its total assets. The increasing trend in recent years suggests improved efficiency in asset utilization.
3. Return on total capital:
Greif's return on total capital has fluctuated, ranging from 11.00% in 2020 to 19.30% in 2022, with a current value of 14.29% in 2023. This ratio measures the profitability of all capital employed in the business, including equity and debt. The variability indicates changes in the profitability of the company's total invested capital.
4. Return on equity (ROE):
Over the past five years, Greif's ROE has shown significant variability, with values ranging from as low as 9.44% in 2020 to as high as 25.80% in 2021. The most recent ROE as of 2023 is 18.44%. This ratio measures the profitability of the shareholders' investment in the company. The fluctuation in ROE can be attributed to changes in the company's net income and equity base.
Overall, Greif's profitability ratios have shown variation over the years, indicating changes in the company's operational efficiency and profitability. The increasing trend in ROA and operating ROA suggests improved asset utilization and operating income generation. However, the fluctuations in return on total capital and ROE indicate that the company's profitability from total capital and shareholders' equity has been somewhat inconsistent.