Heidrick & Struggles International (HSII)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 3.38% | 9.74% | 19.33% | 15.18% | -4.52% |
| Operating profit margin | 0.67% | 7.24% | 10.36% | 9.74% | -5.65% |
| Pretax margin | 2.75% | 8.52% | 10.63% | 10.51% | -4.99% |
| Net profit margin | 0.78% | 5.23% | 7.34% | 7.20% | -5.99% |
Heidrick & Struggles International's profitability ratios have shown varying trends over the past five years. The Gross Profit Margin has improved from a negative rate of -4.52% in 2020 to 3.38% in 2024, indicating an increase in the percentage of revenue retained after accounting for the cost of goods sold.
Similarly, the Operating Profit Margin has shown improvement, rising from -5.65% in 2020 to 0.67% in 2024. This indicates the company's ability to control operating expenses and generate profits from its core business activities.
The Pretax Margin, which reflects the percentage of profit relative to total revenue before accounting for taxes, increased from -4.99% in 2020 to 2.75% in 2024. This suggests that the company has been able to manage its operational costs and other expenses more efficiently over the years.
On the other hand, the Net Profit Margin, representing the percentage of net income relative to total revenue, has fluctuated. It rose from -5.99% in 2020 to 7.20% in 2021, but then declined to 0.78% in 2024. This indicates that although the company has been able to generate profits, the level of profitability has decreased in the most recent year.
Overall, Heidrick & Struggles International has shown improvements in its gross, operating, and pretax margins, but the net profit margin has declined. This may suggest a need for the company to focus on managing expenses more effectively to enhance overall profitability.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.63% | 6.60% | 9.55% | 8.88% | -4.51% |
| Return on assets (ROA) | 0.73% | 4.77% | 6.76% | 6.56% | -4.79% |
| Return on total capital | 1.66% | 16.30% | 27.34% | 29.24% | -13.28% |
| Return on equity (ROE) | 1.93% | 11.77% | 19.36% | 21.60% | -14.09% |
Heidrick & Struggles International's profitability ratios show varied performance across different years. Let's break down the analysis:
1. Operating return on assets (Operating ROA):
- It improved significantly from -4.51% in December 2020 to 9.55% in December 2022, indicating the company's efficiency in generating operating income from its assets. However, it decreased to 6.60% by the end of December 2023 and further to 0.63% by the end of December 2024.
2. Return on assets (ROA):
- The ROA was negative in December 2020 but turned positive in the following years. It peaked at 6.76% by December 2022 before declining to 0.73% by December 2024. This ratio signifies the company's ability to generate profit from its total assets.
3. Return on total capital:
- The return on total capital improved significantly from -13.28% in December 2020 to 27.34% by December 2022, indicating efficient capital allocation. However, it dropped to 1.66% by December 2024, which may suggest a less effective utilization of total capital.
4. Return on equity (ROE):
- The ROE also followed a similar trend, starting negative in December 2020 but turning positive in subsequent years. It peaked at 21.60% in December 2021 before declining to 1.93% by December 2024. ROE reflects the company's ability to generate profit relative to shareholders' equity.
In summary, Heidrick & Struggles International witnessed improvements in profitability ratios from 2020 to 2022, indicating efficient operations and capital management. However, there was a decline in these ratios by December 2024, suggesting potential challenges in maintaining profitability levels. Further analysis of the company's financial strategies and market conditions may provide insights into these fluctuations.