KAR Auction Services Inc (KAR)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 46.53% | 47.26% | 45.09% | 42.27% | 41.27% |
| Operating profit margin | 10.19% | -0.32% | 11.43% | 9.35% | 6.23% |
| Pretax margin | 8.83% | -8.91% | 2.54% | 4.51% | 0.25% |
| Net profit margin | 6.14% | -9.37% | 1.88% | 2.95% | 0.02% |
KAR Auction Services Inc's gross profit margin has shown a positive trend over the years, increasing from 41.27% in 2020 to 46.53% in 2024. This indicates the company's ability to efficiently generate profits from its core operations.
The operating profit margin also exhibited growth, reaching a peak of 11.43% in 2022 before slightly declining to 10.19% in 2024. This suggests that the company effectively managed its operating expenses to improve profitability.
On the other hand, the pretax margin experienced fluctuations, with a significant drop to -8.91% in 2023, implying challenges in generating profits before accounting for taxes. However, the margin rebounded to 8.83% in 2024, indicating a recovery in profitability.
In terms of net profit margin, the company faced a loss in 2023 with a margin of -9.37%, signaling a period of financial difficulty. Nevertheless, KAR Auction Services Inc managed to turn this around in 2024, achieving a net profit margin of 6.14%.
Overall, KAR Auction Services Inc's profitability ratios reflect a mixed performance, with improvements in gross and operating profitability but facing challenges in pretax and net profitability in certain 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) | 3.94% | -0.11% | 3.39% | 2.84% | 2.01% |
| Return on assets (ROA) | 2.38% | -3.26% | 0.56% | 0.90% | 0.01% |
| Return on total capital | 13.38% | 0.48% | 7.41% | 6.06% | 6.20% |
| Return on equity (ROE) | 8.19% | -7.95% | 1.34% | 3.16% | 0.02% |
KAR Auction Services Inc's profitability ratios indicate mixed performance over the years.
1. Operating return on assets (Operating ROA) has shown a general upward trend from 2.01% in 2020 to 3.94% in 2024, indicating improved operational efficiency in generating profits relative to its asset base.
2. Return on assets (ROA) has been volatile, with a sharp decline to -3.26% in 2023 but recovering to 2.38% in 2024. This suggests fluctuations in the company's ability to generate profits from its total assets.
3. Return on total capital has shown variability, increasing from 6.20% in 2020 to 13.38% in 2024, with a notable dip to 0.48% in 2023. This ratio reflects the company's efficiency in generating returns from both equity and debt capital.
4. Return on equity (ROE) has also displayed fluctuations, dropping to -7.95% in 2023 but bouncing back to 8.19% in 2024. ROE reflects the profitability of the company for its shareholders and indicates the efficiency of using equity to generate profits.
Overall, KAR Auction Services Inc has seen improvements in some profitability ratios, signaling enhanced operational performance and better returns for shareholders in recent years. However, the company's profitability metrics have also shown periods of inconsistency and volatility, warranting further analysis to assess the factors driving these fluctuations.