Ichor Holdings Ltd (ICHR)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 13.06% | 16.70% | 16.29% | 13.79% | 14.15% |
| Operating profit margin | -1.38% | 6.76% | 7.43% | 4.59% | 2.45% |
| Pretax margin | -3.93% | 5.94% | 6.77% | 3.57% | 0.70% |
| Net profit margin | -5.43% | 5.74% | 6.51% | 3.68% | 1.76% |
Ichor Holdings Ltd's profitability ratios have shown a mixed trend over the past five years. The gross profit margin has fluctuated slightly, ranging from a low of 13.06% in 2023 to a high of 16.70% in 2022. This indicates the company's ability to generate profits after deducting the cost of goods sold.
However, the operating profit margin has been more volatile, with a negative margin of -1.38% in 2023 and varying between 2.45% and 7.43% in the preceding years. This implies that the company's operating expenses have had a significant impact on its profitability.
Similarly, the pretax margin and net profit margin have also shown fluctuations. The pretax margin ranged from a low of -3.93% in 2023 to a high of 6.77% in 2021, while the net profit margin varied from a negative 5.43% in 2023 to a positive 6.51% in 2021.
Overall, the profitability ratios of Ichor Holdings Ltd indicate a degree of inconsistency in its ability to generate profits, with potential areas of concern in managing operating expenses and achieving consistent net profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -1.16% | 7.92% | 7.94% | 5.37% | 2.64% |
| Return on assets (ROA) | -4.58% | 6.72% | 6.94% | 4.30% | 1.89% |
| Return on total capital | -1.45% | 9.81% | 10.20% | 6.80% | 3.82% |
| Return on equity (ROE) | -7.61% | 12.39% | 14.16% | 8.08% | 4.85% |
Based on the profitability ratios of Ichor Holdings Ltd over the last five years, there are some fluctuations in the company's performance:
1. Operating ROA: There was a significant decrease in operating return on assets in 2023 compared to 2022 and 2021, indicating that the company's operating income generated from its assets declined. This may be a cause for concern as operating ROA is negative in 2023.
2. ROA: Return on assets also saw a decline in 2023 compared to the previous two years, with a negative ROA indicating that the company's net income was negative relative to its total assets. This suggests that the company may not be effectively utilizing its assets to generate profits.
3. Return on total capital: The return on total capital decreased in 2023 compared to 2022 and 2021, indicating a decline in the company's ability to generate returns from its total capital employed. A negative return on total capital in 2023 suggests that the company's capital is not being effectively utilized to generate profits.
4. ROE: Return on equity followed a similar trend as other profitability ratios, showing a decline in 2023 compared to 2022 and 2021. The negative ROE in 2023 indicates that the company's shareholder equity is not generating a positive return.
Overall, the declining trend in profitability ratios for Ichor Holdings Ltd, particularly in 2023, raises concerns about the company's operational efficiency and ability to generate returns for its shareholders. It is important for the company to assess its operations and financial strategies to improve its profitability in the future.