Innospec Inc (IOSP)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 29.42% | 30.33% | 29.88% | 29.32% | 28.74% |
| Operating profit margin | 9.64% | 8.29% | 9.54% | 8.91% | 2.83% |
| Pretax margin | 2.10% | 8.94% | 9.40% | 9.05% | 3.32% |
| Net profit margin | 1.80% | 7.13% | 6.77% | 6.27% | 2.40% |
Innospec Inc's profitability ratios exhibit a generally positive trend over the past five years. The gross profit margin has shown a gradual increase from 28.74% in 2020 to 29.42% in 2024, indicating efficient cost management and improved pricing strategies.
The operating profit margin experienced fluctuations but overall displayed growth, reaching 9.64% in 2024 compared to 2.83% in 2020. This suggests that the company has been able to enhance its operational efficiency and increase profitability from its core business activities.
Similarly, the pretax margin demonstrates a positive trend, with a peak of 9.40% in 2022. Despite a slight decline in 2024 to 2.10%, the company has maintained relatively strong profitability before accounting for taxes.
However, the net profit margin showed a decline in 2024 to 1.80% from 7.13% in 2023. This decrease may indicate higher tax expenses or other factors impacting the bottom line profitability of Innospec Inc.
Overall, while the company's gross and operating profit margins have improved steadily, there may be some areas of concern in terms of the downward trend in the net profit margin. Further analysis is required to identify the specific drivers behind these changes and to assess the sustainability of the company's profitability in the coming periods.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.26% | 9.46% | 11.68% | 8.41% | 2.41% |
| Return on assets (ROA) | 1.91% | 8.14% | 8.29% | 5.92% | 2.05% |
| Return on total capital | 14.69% | 14.09% | 18.04% | 12.80% | 3.57% |
| Return on equity (ROE) | 2.74% | 12.12% | 12.81% | 9.01% | 3.03% |
Innospec Inc's profitability ratios show a generally positive trend over the five-year period from 2020 to 2024.
1. Operating Return on Assets (Operating ROA):
- Innospec's Operating ROA has increased from 2.41% in 2020 to 10.26% in 2024, indicating that the company's operating profit generated from its assets has improved significantly over the years.
2. Return on Assets (ROA):
- The ROA of Innospec has also shown a positive trend, rising from 2.05% in 2020 to 8.14% in 2023 and then declining slightly to 1.91% in 2024. This suggests that the company has been able to generate more profit from its total assets as compared to the previous years, although there was a slight dip in 2024.
3. Return on Total Capital:
- The Return on Total Capital for Innospec increased from 3.57% in 2020 to 18.04% in 2022, before stabilizing around 14% in the following years. This ratio indicates the overall efficiency of the company in generating returns from both equity and debt capital.
4. Return on Equity (ROE):
- The Return on Equity for Innospec showed a positive trajectory, growing from 3.03% in 2020 to 12.81% in 2022, then dropping to 2.74% in 2024. ROE reflects the profitability generated for the company's shareholders, and the decreasing trend in 2024 may be an area of concern for investors.
Overall, the profitability ratios of Innospec Inc demonstrate a consistent improvement in operational efficiency and capital utilization, although there are some fluctuations in certain ratios in the later years that may warrant further investigation.