KAR Auction Services Inc (KAR)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | -2.63% | 9.46% | 17.30% | 11.05% | 11.86% |
| Operating profit margin | -0.32% | 11.43% | 8.79% | 5.22% | 11.29% |
| Pretax margin | -8.86% | 16.53% | 5.63% | -0.81% | 8.13% |
| Net profit margin | -9.37% | 15.87% | 4.58% | 0.04% | 6.78% |
Openlane Inc.'s profitability ratios have shown variable trends over the past five years. The gross profit margin has generally been improving, from 41.87% in 2019 to 47.26% in 2023, indicating the company's ability to efficiently control its cost of goods sold and generate profits from its sales.
The operating profit margin has fluctuated during this period, with a notable improvement in 2023 to 14.93% compared to 9.20% in 2022. This suggests that the company has been able to better manage its operating expenses and increase profitability from its core business activities.
However, the pretax margin and net profit margin show a less favorable trend. The pretax margin has been negative since 2020, reaching -8.91% in 2023, indicating that the company's expenses and taxes have exceeded its gross profits. The net profit margin, also negative for the past four years, deteriorated to -9.37% in 2023, indicating that the company is experiencing net losses after accounting for all expenses, including taxes.
In conclusion, while Openlane Inc. has shown improvement in its gross and operating profit margins, its pretax and net profit margins reflect challenges in controlling expenses and generating net profits. The company may need to address cost management and operational efficiency to enhance its overall 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) | -0.11% | 3.39% | 1.71% | 1.02% | 4.77% |
| Return on assets (ROA) | -3.26% | 4.71% | 0.89% | 0.01% | 2.86% |
| Return on total capital | 0.65% | 21.49% | 6.16% | 3.39% | 11.84% |
| Return on equity (ROE) | -11.61% | 15.89% | 4.40% | 0.03% | 11.42% |
Openlane Inc.'s profitability ratios have shown some fluctuations over the past five years.
1. Operating return on assets (Operating ROA) has improved from 2019 to 2023, indicating that the company has become more efficient in generating operating profits from its assets.
2. Return on assets (ROA) has been negative in recent years, suggesting that the company has been experiencing challenges in generating profits from its total assets.
3. Return on total capital has also shown fluctuations but generally shows a positive trend, indicating that the company is generating a return on both equity and debt capital invested in the business.
4. Return on equity (ROE) has significantly decreased from 2019 to 2023, indicating a declining profitability trend for equity investors in the company.
Overall, Openlane Inc. needs to focus on improving its overall profitability, particularly with regards to generating returns from its assets and equity to ensure sustained growth and value creation for its shareholders.