Graco Inc (GGG)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 53.11% | 52.88% | 49.33% | 52.02% | 51.81% |
| Operating profit margin | 26.98% | 29.46% | 26.72% | 26.73% | 23.74% |
| Pretax margin | 27.88% | 27.73% | 26.39% | 25.58% | 22.70% |
| Net profit margin | 23.00% | 23.07% | 21.49% | 22.13% | 20.03% |
Graco Inc's profitability ratios show a generally positive trend over the years. The gross profit margin, which indicates the percentage of revenue retained after accounting for the cost of goods sold, has been relatively stable, ranging from 49.33% in 2022 to 53.11% in 2024. This suggests that Graco has been effective in managing its production costs and pricing strategies.
The operating profit margin, which measures the percentage of sales that translates into operating income, has shown variability, reaching a high of 29.46% in 2023 but slightly decreasing to 26.98% in 2024. This indicates that while Graco has been able to generate healthy operating profits, there may have been some fluctuations in its operating expenses or revenues.
The pretax margin, representing the percentage of sales that results in pre-tax income, has been on an upward trajectory, rising from 22.70% in 2020 to 27.88% in 2024. This suggests that Graco has been successful in managing its operating expenses and financial activities efficiently.
Lastly, the net profit margin, which shows the percentage of revenue that translates into net income, has also demonstrated an upward trend, increasing from 20.03% in 2020 to 23.00% in 2024. This indicates that Graco has been able to effectively control its non-operating expenses and taxes to improve its bottom line.
Overall, Graco Inc's profitability ratios reflect a company that has been able to maintain and enhance its profitability over the years through effective cost management, pricing strategies, and financial decisions.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 18.16% | 23.76% | 23.48% | 21.75% | 19.70% |
| Return on assets (ROA) | 15.48% | 18.61% | 18.89% | 18.00% | 16.62% |
| Return on total capital | 0.00% | 29.08% | 30.95% | 30.34% | 30.06% |
| Return on equity (ROE) | 18.81% | 22.77% | 24.77% | 25.73% | 25.74% |
Graco Inc's profitability ratios indicate a varying trend over the years.
1. Operating Return on Assets (Operating ROA) has been consistently improving from 19.70% in December 31, 2020, to 23.76% in December 31, 2023, before experiencing a slight decline to 18.16% by December 31, 2024. This ratio measures the company's operating income generated per dollar of assets, showing the efficiency of its operational management.
2. Return on Assets (ROA) also shows a generally positive trend, increasing from 16.62% in December 31, 2020, to 18.61% in December 31, 2023, and then declining to 15.48% by December 31, 2024. ROA indicates the company's overall profitability relative to its total assets.
3. Return on Total Capital saw consistent performance from December 31, 2020, to 2022, with a steady increase from 30.06% to 30.95%. However, there was a significant drop to 29.08% by December 31, 2023, and no information is available for 2024, indicating a different capital structure that year.
4. Return on Equity (ROE) has been gradually decreasing from 25.74% in December 31, 2020, to 18.81% by December 31, 2024. ROE measures the return generated on shareholders' equity, reflecting the company's ability to generate profits from the shareholders' investments.
Overall, Graco Inc has shown positive profitability performance in terms of Operating ROA and ROA, indicating effective management of assets. However, the declining trends in ROE and the missing data for Return on Total Capital in 2024 raise considerations about the company's financial structure and effectiveness in generating returns for shareholders.