Innospec Inc (IOSP)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 30.33% | 29.88% | 29.32% | 28.74% | 30.83% |
| Operating profit margin | 8.29% | 9.54% | 8.91% | 2.83% | 9.91% |
| Pretax margin | 8.94% | 9.40% | 9.05% | 3.32% | 9.94% |
| Net profit margin | 7.13% | 6.77% | 6.27% | 2.40% | 7.41% |
Innospec Inc's profitability ratios have shown varying trends over the past five years. The gross profit margin has fluctuated within a range of 28.72% to 30.81%, with a slight increase in 2023 compared to the previous year. This indicates the company's ability to control direct production costs and maintain a healthy level of profitability from sales.
The operating profit margin, on the other hand, experienced more significant fluctuations, ranging from 6.27% to 9.91% over the same period. The margin decreased in 2023 compared to 2022, which may suggest a decrease in operating efficiency or an increase in operating expenses relative to revenue.
Similarly, the pretax margin and net profit margin have shown fluctuations over the five-year period. The pretax margin ranged from 3.33% to 9.94%, with a slight increase in 2023 compared to the previous year. The net profit margin ranged from 2.41% to 7.41%, with an increase in 2023 compared to 2022.
Overall, while the company has maintained relatively stable gross profit margins, the operating, pretax, and net profit margins have shown more variability. It is important for Innospec Inc to continue monitoring and managing its operating expenses to improve profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.46% | 11.68% | 8.41% | 2.41% | 10.21% |
| Return on assets (ROA) | 8.14% | 8.29% | 5.92% | 2.05% | 7.63% |
| Return on total capital | 14.09% | 18.04% | 12.80% | 3.57% | — |
| Return on equity (ROE) | 12.12% | 12.81% | 9.01% | 3.03% | — |
Innospec Inc's profitability ratios show a mixed performance over the past five years. The Operating return on assets (Operating ROA) has fluctuated, reaching a peak of 11.68% in 2022 but then decreasing to 9.46% in 2023. This ratio indicates the company's ability to generate operating profits from its assets, with a higher percentage reflecting better operational efficiency.
The Return on assets (ROA) has also shown variability, with a significant increase from 2.05% in 2020 to 8.15% in 2023. ROA measures overall profitability by evaluating the company's ability to generate profits from its total assets. A rising ROA suggests improved asset utilization and profitability.
The Return on total capital reflects the efficiency of the company in generating returns for both debt and equity holders. While this ratio has seen fluctuations, it has generally shown a positive trend, increasing from 7.92% in 2020 to 14.09% in 2023. This indicates that the company has been able to generate higher returns for its capital providers over the years.
Lastly, the Return on equity (ROE) has displayed a similar pattern of variability, reaching a peak of 12.81% in 2022 before decreasing slightly to 12.13% in 2023. ROE measures the company's ability to generate profits from shareholders' equity, and a higher ratio signifies better profitability for equity investors.
Overall, while Innospec Inc's profitability ratios have shown fluctuations year over year, there are signs of improved efficiency and profitability in recent years, especially in terms of generating returns from total assets and capital. Management should continue to focus on optimizing asset utilization and enhancing operational effectiveness to sustain and further improve profitability in the future.