Gates Industrial Corporation plc (GTES)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 38.06% | 35.19% | 38.54% | 37.05% | 37.01% |
| Operating profit margin | 12.96% | 10.80% | 13.93% | 7.56% | 11.23% |
| Pretax margin | 7.32% | 6.63% | 9.08% | 2.15% | 6.29% |
| Net profit margin | 6.52% | 6.21% | 8.55% | 2.84% | 22.35% |
Gates Industrial Corporation plc has displayed fluctuating profitability over the past five years as evidenced by its various profitability ratios.
The gross profit margin has shown a general trend of stability, hovering between 35% and 38% over the period. This ratio indicates that the company is effectively managing its production costs and pricing strategies to generate a decent level of gross profit from its sales.
The operating profit margin has seen some volatility, with a notable increase in 2023 to 12.96% compared to 10.80% in 2022. This suggests that the company has been able to control its operating expenses more efficiently in the most recent year, leading to improved profitability at the operating level.
The pretax margin has also experienced fluctuations, with a significant jump in 2023 to 7.32% from 6.63% in 2022. This indicates that Gates Industrial Corporation plc has become more effective in managing its other operating expenses and interest payments relative to its revenue, resulting in a higher proportion of pre-tax profit.
However, the net profit margin has shown inconsistency, particularly in 2020 where it dropped significantly to 2.84% before recovering in subsequent years. The substantial decrease in 2020 may have been due to one-off expenses, economic conditions, or operational issues that impacted the company's bottom line.
Overall, while Gates Industrial Corporation plc has demonstrated resilience in maintaining its gross profit margin and improving its operating and pretax margins, there is room for further analysis to understand the factors contributing to the fluctuations in net profit margin over the years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.38% | 5.34% | 6.43% | 2.84% | 4.68% |
| Return on assets (ROA) | 3.21% | 3.07% | 3.94% | 1.07% | 9.31% |
| Return on total capital | 7.53% | 6.78% | 7.98% | 3.92% | 6.33% |
| Return on equity (ROE) | 7.23% | 7.10% | 9.58% | 2.83% | 26.03% |
Gates Industrial Corporation plc's profitability ratios exhibit fluctuating trends over the past five years. The Operating return on assets (Operating ROA) has shown a general improvement, reaching 6.38% in 2023 from 4.68% in 2019. This indicates the company's ability to generate profits from its operating activities relative to its total assets.
Similarly, the Return on assets (ROA) has varied, with a peak of 9.31% in 2019 and a low of 1.07% in 2020, but has been relatively stable around 3% in recent years. This ratio reflects the overall efficiency of the company in generating profits from its assets.
Return on total capital has shown an upward trend, from 6.33% in 2019 to 7.53% in 2023. This metric considers both equity and debt in assessing the company's ability to generate returns for all its capital providers.
Return on equity (ROE) has also demonstrated fluctuations, with a substantial decline from 26.03% in 2019 to 2.83% in 2020, followed by a partial recovery to 7.23% in 2023. ROE reflects the company's ability to generate returns for its shareholders from their invested equity.
Overall, while Gates Industrial Corporation plc has shown improvements in some profitability ratios, there has been volatility in others, suggesting varying levels of efficiency and profitability in different areas of the business over the past five years.