Kennametal Inc (KMT)
Profitability ratios
Return on sales
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 30.64% | 31.11% | 32.20% | 30.00% | 28.08% |
| Operating profit margin | 8.32% | 9.26% | 10.84% | 5.55% | 1.18% |
| Pretax margin | 6.85% | 7.44% | 10.00% | 3.30% | 0.07% |
| Net profit margin | 5.34% | 5.70% | 7.19% | 2.96% | -0.30% |
Kennametal Inc's profitability ratios have shown fluctuations over the past five years. The gross profit margin has generally declined from 32.20% in 2022 to 30.64% in 2024, indicating a decrease in profitability at the gross level. However, the company has maintained a relatively stable operating profit margin, though there was a slight decrease from 9.26% in 2023 to 8.32% in 2024.
The pretax margin has shown variability, with a significant increase from 3.30% in 2021 to 10.00% in 2022, followed by a slight decline to 6.85% in 2024. This indicates fluctuations in the company's ability to generate profits before taxes relative to its total revenue.
The net profit margin, reflecting the company's overall profitability after all expenses, has also varied. Although there was a decrease in 2024 compared to previous years, Kennametal has demonstrated an improvement in its net profit margin from -0.30% in 2020 to 5.34% in 2024.
Overall, while the company has managed to maintain stable operating profitability and improve its net profit margin, fluctuations in the gross profit margin and pretax margin suggest the need for careful cost management and revenue generation strategies to sustain and enhance profitability in the future.
Return on investment
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.80% | 7.55% | 8.48% | 3.83% | 0.73% |
| Return on assets (ROA) | 4.37% | 4.65% | 5.62% | 2.04% | -0.19% |
| Return on total capital | 9.48% | 10.16% | 12.69% | 5.42% | 1.96% |
| Return on equity (ROE) | 8.75% | 9.29% | 11.55% | 4.09% | -0.46% |
Kennametal Inc's profitability ratios show a mixed performance over the past five years. The operating return on assets (Operating ROA) has shown a gradual decrease from 8.48% in 2022 to 6.80% in 2024, indicating a decline in the company's operating efficiency in generating profits from its assets. However, the Operating ROA remains positive, suggesting that Kennametal is still able to generate profits from its core operations.
The return on assets (ROA) has fluctuated over the years, ranging from a low of -0.19% in 2020 to a high of 5.62% in 2022. The positive trend from 2020 to 2022 indicates an improvement in Kennametal's ability to generate profits from its total assets. However, the decrease in ROA to 4.37% in 2024 raises concerns about the company's overall profitability.
The return on total capital reflects Kennametal's ability to generate returns for both equity and debt holders. The ratio has shown an increasing trend from 2019 to 2022, reaching a peak of 12.69% before declining to 9.48% in 2024. Although the return on total capital remains positive, the downward trend suggests a potential decrease in the company's overall profitability.
Lastly, the return on equity (ROE) has also displayed fluctuations over the years, with a low of -0.46% in 2020 and a high of 11.55% in 2022. The ROE measures the return generated for the shareholders, and Kennametal's positive ROE indicates some level of profitability for its equity holders. However, the decrease in ROE to 8.75% in 2024 implies a lower return for shareholders compared to previous years.
In conclusion, while Kennametal Inc has shown some positive signs of profitability in certain years, such as in 2022, the recent declines in profitability ratios in 2024 raise concerns about the company's ability to maintain consistent profitability in the future. Further analysis of the company's financial performance and strategic decisions may be necessary to understand the underlying reasons for these fluctuations in profitability ratios.