H2O America (HTO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 56.80% | 57.94% | 57.54% | 55.53% | 56.08% |
| Operating profit margin | 22.78% | 22.29% | 21.10% | 19.38% | 20.84% |
| Pretax margin | 13.75% | 13.57% | 13.26% | 12.00% | 12.38% |
| Net profit margin | 12.56% | 12.68% | 11.89% | 10.54% | 10.90% |
The analysis of H2O America’s profitability ratios over the period from December 31, 2020, to December 31, 2024, indicates a generally stable and gradually improving profit profile.
Gross profit margin experienced slight fluctuations, starting at 56.08% in 2020, decreasing marginally to 55.53% in 2021, then rising to 57.54% in 2022, and reaching a peak of 57.94% in 2023 before declining slightly to 56.80% in 2024. This pattern suggests a relatively stable core profitability at the gross level, with minor variations likely reflecting shifts in cost of goods sold or pricing strategies.
Operating profit margin showed a consistent upward trend, from 20.84% in 2020 to 22.78% in 2024. This indicates that the company's operating efficiency has improved slightly over the period, perhaps through better cost management or increased operational leverage, contributing to higher profitability before accounting for interest and taxes.
Pretax margin followed a similar positive trajectory, increasing from 12.38% in 2020 to 13.75% in 2024. This suggests that the company's ability to convert operating profit into profit before taxes has improved modestly, with a steady reduction in expenses or improved financial management.
The net profit margin demonstrated an overall upward movement, starting at 10.90% in 2020, declining slightly to 10.54% in 2021, then rising more significantly to 11.89% in 2022, and further climbing to 12.68% in 2023 before decreasing slightly to 12.56% in 2024. The net margin fluctuations reflect the combined effects of operating performance, interest expenses, taxes, and other non-operating items, but the general trend confirms an improvement in the company’s overall profitability.
Overall, H2O America’s profitability ratios depict a company that has maintained stable gross margins while progressively enhancing operational and bottom-line profitability. The improvements in operating, pretax, and net profit margins across the analyzed years indicate effective management of costs and operations, contributing to a healthier profitability profile 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) | 3.66% | 3.44% | 3.49% | 3.18% | 3.55% |
| Return on assets (ROA) | 2.02% | 1.96% | 1.97% | 1.73% | 1.86% |
| Return on total capital | 12.75% | 12.74% | 12.64% | 11.91% | 13.54% |
| Return on equity (ROE) | 6.87% | 6.89% | 6.65% | 5.85% | 6.71% |
The analysis of H2O America's profitability ratios from 2020 through 2024 reveals a generally stable performance with some fluctuations over the period.
The Operating Return on Assets (Operating ROA) exhibited a slight decline from 3.55% in 2020 to 3.18% in 2021, followed by an improvement to 3.49% in 2022. It then maintained a relatively stable range with a marginal increase to 3.44% in 2023 and a further rise to 3.66% in 2024, indicating a modest overall upward trend toward the end of the period.
The Return on Assets (ROA), which accounts for overall profitability relative to total assets, showed a slight downward movement from 1.86% in 2020 to 1.73% in 2021. It increased again to 1.97% in 2022, then stabilized with minimal variation around 1.96% in 2023 and 2.02% in 2024, reflecting a steady, albeit modest, improvement in asset efficiency.
The Return on Total Capital experienced a decline from 13.54% in 2020 to 11.91% in 2021, followed by a recovery to 12.64% in 2022. The ratio remained relatively stable thereafter, with slight increases to 12.74% in 2023 and 12.75% in 2024, suggesting consistent efficiency in capital utilization over the latter years.
The Return on Equity (ROE) decreased from 6.71% in 2020 to 5.85% in 2021, then increased to 6.65% in 2022. The ratio remained relatively steady with marginal growth to 6.89% in 2023 and 6.87% in 2024, indicating a consistent ability to generate profits from shareholders' equity.
Overall, while there are some fluctuations, the profitability ratios of H2O America demonstrate stability with slight upward trends toward 2024, reflecting an improving or steady profitability outlook across key financial metrics.