Genuine Parts Co (GPC)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 36.29% | 35.90% | 35.03% | 35.16% | 34.19% |
| Operating profit margin | 5.23% | 7.57% | 7.45% | 6.69% | 6.23% |
| Pretax margin | 5.01% | 7.55% | 7.12% | 6.36% | 2.29% |
| Net profit margin | 3.85% | 5.70% | 5.35% | 4.76% | 0.99% |
Genuine Parts Co's profitability ratios exhibit a mixed performance over the period from December 31, 2020, to December 31, 2024.
1. Gross Profit Margin: The company's gross profit margin has been increasing steadily over the years, from 34.19% in 2020 to 36.29% in 2024. This indicates that Genuine Parts Co has been effectively managing its production costs and generating higher profit margins on its sales.
2. Operating Profit Margin: Despite an initial increase from 6.23% in 2020 to 7.45% in 2022, the operating profit margin declined to 5.23% in 2024. This suggests that the company's operating expenses relative to its sales have increased, impacting its profitability at the operational level.
3. Pretax Margin: Genuine Parts Co's pretax margin has shown a fluctuating trend, with a significant improvement from 2.29% in 2020 to 7.55% in 2023, followed by a drop to 5.01% in 2024. This indicates that the company's pre-tax profitability has experienced fluctuations, potentially due to changes in tax expenses and other factors affecting pre-tax earnings.
4. Net Profit Margin: The net profit margin of Genuine Parts Co has shown an overall increasing trend, from 0.99% in 2020 to 3.85% in 2024. While there was a notable improvement in profitability until 2023, the decline in 2024 suggests that the company's bottom-line profitability has been impacted, possibly by factors such as increased expenses or declining revenues.
In summary, Genuine Parts Co has demonstrated improvements in its gross profit margin and net profit margin over the years. However, the decline in operating profit margin and pretax margin in 2024 indicates a need for the company to closely monitor and manage its operational and tax-related expenses to sustain 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) | 6.37% | 9.72% | 9.98% | 8.80% | 7.66% |
| Return on assets (ROA) | 4.69% | 7.33% | 7.17% | 6.26% | 1.22% |
| Return on total capital | 29.34% | 41.05% | 43.44% | 36.17% | 31.26% |
| Return on equity (ROE) | 20.84% | 29.91% | 31.20% | 25.75% | 5.10% |
Genuine Parts Co has shown improvement in its profitability ratios over the years.
- Operating return on assets (Operating ROA) has increased steadily from 7.66% in December 2020 to 9.72% in December 2023, with a slight dip to 6.37% in December 2024. This indicates the company's ability to generate operating income relative to its total assets.
- Return on assets (ROA) has also exhibited a positive trend, rising from 1.22% in December 2020 to 7.33% in December 2023 before slightly dropping to 4.69% in December 2024. ROA reflects Genuine Parts Co's efficiency in utilizing its assets to generate profits.
- Return on total capital has shown significant growth, with a substantial increase from 31.26% in December 2020 to 43.44% in December 2022. Although there was a slight decline to 29.34% in December 2024, the overall trend indicates the company's ability to generate returns for both debt and equity holders.
- Return on equity (ROE) has also improved notably, rising from 5.10% in December 2020 to 31.20% in December 2022. By the end of December 2024, the ROE stood at 20.84%, reflecting the company's efficiency in generating profits from shareholder equity.
Overall, Genuine Parts Co's profitability ratios demonstrate a positive trajectory, highlighting its ability to effectively utilize assets and capital to generate profits and create value for its shareholders.