Graham Holdings Co (GHC)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 30.61% | 29.72% | 32.28% | 33.63% | 33.82% |
| Operating profit margin | 4.50% | 1.57% | 11.33% | 8.58% | 14.36% |
| Pretax margin | 21.39% | 6.77% | 3.10% | 14.11% | 14.10% |
| Net profit margin | 15.13% | 4.65% | 1.71% | 11.05% | 10.40% |
Graham Holdings Co's profitability ratios have shown variations over the years.
1. Gross profit margin: The company's gross profit margin has decreased from 33.82% in 2020 to 30.61% in 2024. This indicates a slight decline in the efficiency of the company in generating profit from its core operations.
2. Operating profit margin: There was a notable decrease in the operating profit margin from 14.36% in 2020 to 4.50% in 2024. This suggests that the company's operational efficiency has declined, impacting its ability to generate profits before considering interest and taxes.
3. Pretax margin: The pretax margin fluctuated during the period, with a significant increase from 3.10% in 2022 to 21.39% in 2024. This implies that the company's profitability before tax expenses significantly improved in 2024.
4. Net profit margin: The net profit margin also varied, with a decrease in 2022 to 1.71% and then an increase to 15.13% in 2024. This indicates that the company's bottom line profitability improved significantly in 2024 compared to previous years.
Overall, while there have been fluctuations in profitability ratios, Graham Holdings Co managed to improve its profitability towards the end of the period. It is important for the company to monitor and manage its margins effectively to sustain and enhance profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.81% | 0.97% | 6.76% | 3.68% | 6.44% |
| Return on assets (ROA) | 9.44% | 2.86% | 1.02% | 4.74% | 4.66% |
| Return on total capital | 28.45% | 9.25% | 4.71% | 11.01% | 11.87% |
| Return on equity (ROE) | 17.02% | 5.16% | 1.80% | 8.00% | 7.99% |
Graham Holdings Co's profitability ratios indicate fluctuations in performance over the years. The Operating return on assets (Operating ROA) decreased from 6.44% in 2020 to 3.68% in 2021, before rebounding to 6.76% in 2022. However, there was a significant drop to 0.97% in 2023, followed by a slight increase to 2.81% in 2024.
In terms of Return on assets (ROA), the company saw a slight increase from 4.66% in 2020 to 4.74% in 2021, followed by a dip to 1.02% in 2022. The ROA then improved to 2.86% in 2023 and rose notably to 9.44% in 2024.
Return on total capital displayed a similar trend, starting at 11.87% in 2020, dropping to 11.01% in 2021, further declining to 4.71% in 2022, and rebounding to 9.25% in 2023. The ratio surged to 28.45% in 2024, showing a substantial improvement.
The Return on equity (ROE) also saw fluctuations, with ratios of 7.99% in 2020, 8.00% in 2021, 1.80% in 2022, 5.16% in 2023, and a significant increase to 17.02% in 2024. Overall, Graham Holdings Co's profitability ratios reveal a mix of positive and negative trends in performance over the years, highlighting the company's varying levels of efficiency in generating returns for its stakeholders.