Heritage Financial Corporation (HFWA)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Operating profit margin | 99.68% | 30.44% | 39.94% | 50.13% | 22.32% |
| Pretax margin | 16.87% | 30.44% | 39.94% | 50.13% | 22.32% |
| Net profit margin | 13.97% | 25.78% | 32.88% | 40.78% | 19.55% |
Based on the provided data, Heritage Financial Corporation has consistently maintained a strong Gross Profit Margin of 100.00% from 2020 to 2024, indicating that the company is effectively managing its production costs and generating healthy profits from its core business activities.
The Operating Profit Margin has shown variability over the years, increasing significantly from 22.32% in 2020 to the peak of 99.68% in 2024. This suggests that the company has been able to improve its operational efficiency and control its operating expenses effectively, leading to higher profitability.
Similarly, the Pretax Margin has also depicted a positive trend, reaching its maximum in 2021 at 50.13% before gradually decreasing to 16.87% in 2024. This indicates that although the company's profitability before taxes remained strong in the initial years, there might have been some challenges or increased costs impacting it in the later years.
The Net Profit Margin, which measures the company's profitability after all expenses, has followed a downward trajectory from 19.55% in 2020 to 13.97% in 2024. This decline in net profit margin signals that the company's bottom-line profitability has decreased over the years, possibly due to factors like increased taxes, interest expenses, or other costs affecting the net earnings.
Overall, Heritage Financial Corporation has demonstrated a strong performance in terms of Gross Profit Margin and Operating Profit Margin, highlighting its ability to efficiently manage costs and generate profits from its operations. However, the decreasing trend in Pretax Margin and Net Profit Margin indicates potential challenges impacting the company's overall profitability in recent years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.34% | 1.02% | 1.42% | 1.62% | 0.80% |
| Return on assets (ROA) | 0.61% | 0.86% | 1.17% | 1.32% | 0.70% |
| Return on total capital | 0.00% | 8.55% | 11.83% | 10.94% | 0.01% |
| Return on equity (ROE) | 5.01% | 7.24% | 10.26% | 11.47% | 5.68% |
Heritage Financial Corporation's profitability ratios have shown varying trends over the past five years.
1. Operating Return on Assets (Operating ROA) increased from 0.80% in 2020 to 1.62% in 2021, indicating improved operational efficiency. However, it slightly decreased to 1.42% by the end of 2022 and further dropped to 1.02% by the end of 2023, before experiencing a significant jump to 4.34% in 2024. This sudden increase in 2024 could signify a positive shift in the company's operating performance.
2. Return on Assets (ROA) showed a similar pattern, starting at 0.70% in 2020, increasing to 1.32% in 2021, but then gradually declining to 0.61% by the end of 2024. The downward trend in ROA suggests potential challenges in generating earnings from the company's total assets.
3. Return on Total Capital saw a substantial improvement from 0.01% in 2020 to 10.94% in 2021 and 11.83% in 2022, indicating efficient utilization of both equity and debt capital. However, it dropped to 8.55% by the end of 2023 and returned to 0.00% in 2024. The sudden drop in 2024 might raise concerns about the company's capital allocation strategies.
4. Return on Equity (ROE) started at 5.68% in 2020, increased to 11.47% in 2021, but gradually declined to 5.01% by the end of 2024. The declining trend in ROE suggests that the company's ability to generate profits from shareholders' equity has weakened over the years.
Overall, Heritage Financial Corporation's profitability ratios display a mix of positive and negative indicators, highlighting fluctuations in operational efficiency, asset utilization, capital management, and shareholder profitability.