Heritage Financial Corporation (HFWA)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 27.08% | 42.39% | 34.94% | 8.79% | 34.23% |
| Operating profit margin | 7.98% | 25.31% | 18.87% | -13.52% | 15.32% |
| Pretax margin | 30.39% | 38.31% | 44.40% | 26.21% | 35.28% |
| Net profit margin | 25.74% | 31.54% | 36.12% | 22.95% | 29.41% |
The profitability ratios of Heritage Financial Corp. have shown fluctuations over the past five years.
1. Gross Profit Margin: The company's gross profit margin has been relatively high, hovering around 98% to 112% from 2019 to 2023. A high gross profit margin suggests that the company is effectively controlling its production costs and pricing its products/services appropriately.
2. Operating Profit Margin: The operating profit margin has also varied, ranging from 21% to 49% during the same period. A lower operating profit margin in certain years may indicate higher operating expenses relative to revenue, impacting the company's overall profitability.
3. Pretax Margin: The pretax margin mirrors the operating profit margin, indicating the company's ability to generate profits before accounting for taxes. This ratio has mirrored the operating profit margin and provides insight into the core profitability of the company.
4. Net Profit Margin: The net profit margin has fluctuated between 18% to 40% over the five-year period. This ratio represents the company's bottom line profitability after all expenses, including taxes, have been accounted for. A higher net profit margin signifies that the company is efficient in managing its expenses relative to its revenue.
In conclusion, while Heritage Financial Corp. has maintained strong profitability ratios overall, it is important for stakeholders to monitor the fluctuations in these ratios to assess the company's operational efficiency and financial health over time.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.27% | 0.94% | 0.69% | -0.41% | 0.63% |
| Return on assets (ROA) | 0.86% | 1.17% | 1.32% | 0.70% | 1.22% |
| Return on total capital | 15.50% | 13.47% | 14.93% | 8.11% | 12.26% |
| Return on equity (ROE) | 7.24% | 10.26% | 11.47% | 5.68% | 8.35% |
The profitability ratios of Heritage Financial Corp. show varying trends over the past five years.
- Operating return on assets (Operating ROA) has fluctuated, ranging from a low of 0.80% in 2020 to a high of 1.62% in 2021. It decreased to 1.02% in 2023, indicating a decline in the company's ability to generate operating profits from its assets.
- Return on assets (ROA) has also shown fluctuations, with the lowest being 0.70% in 2020 and the highest at 1.32% in 2021. In 2023, it decreased to 0.86%, suggesting a decline in the company's overall profitability in relation to its total assets.
- Return on total capital has shown significant fluctuations, with a high of 13.76% in 2021 and a low of 5.30% in 2023. This ratio indicates the company's profitability in relation to both equity and debt capital.
- Return on equity (ROE) has varied as well, ranging from 5.68% in 2020 to 11.47% in 2021. In 2023, it was at 7.24%, reflecting the company's ability to generate profits from shareholders' equity.
Overall, the profitability ratios of Heritage Financial Corp. demonstrate mixed performance over the past five years, with some ratios showing improvement while others fluctuate or decline. It is important for the company to closely monitor these ratios to ensure sustainable profitability and efficient use of its assets and capital.