CarMax Inc (KMX)
Profitability ratios
Return on sales
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 10.22% | 9.43% | 10.31% | 12.55% | 13.40% |
| Operating profit margin | 0.42% | 0.04% | 2.14% | 2.19% | 3.52% |
| Pretax margin | 2.42% | 2.15% | 4.68% | 5.09% | 5.71% |
| Net profit margin | 1.81% | 1.63% | 3.61% | 3.94% | 4.37% |
CarMax Inc's profitability ratios have shown a general downward trend over the past five years. The company's gross profit margin, which indicates how efficiently the company manages its production costs, has decreased from 13.40% in 2020 to 10.22% in 2024. This suggests a decline in the company's ability to generate profit from its sales.
Similarly, CarMax's operating profit margin, a measure of the company's ability to control its operating expenses, has also decreased from 3.52% in 2020 to 0.42% in 2024. This indicates a decline in the company's operational efficiency and cost management.
The trend continues with the pretax margin and net profit margin, both showing a consistent decrease over the past five years. The pretax margin has dropped from 5.71% in 2020 to 2.42% in 2024, while the net profit margin has decreased from 4.37% in 2020 to 1.81% in 2024. These ratios suggest a decline in CarMax's overall profitability and bottom-line performance.
In conclusion, the decreasing profitability ratios of CarMax Inc indicate challenges in managing production costs, operating expenses, and overall profitability over the past five years. It is important for the company to assess and address these issues to improve its financial performance in the future.
Return on investment
| Feb 29, 2024 | Feb 28, 2023 | Feb 28, 2022 | Feb 28, 2021 | Feb 29, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.41% | 0.05% | 2.59% | 1.93% | 3.39% |
| Return on assets (ROA) | 1.76% | 1.85% | 4.37% | 3.47% | 4.21% |
| Return on total capital | 9.98% | 10.07% | 18.68% | 18.49% | 22.42% |
| Return on equity (ROE) | 7.89% | 8.64% | 21.99% | 17.11% | 23.57% |
CarMax Inc's profitability ratios show varying performance over the past five years.
- Operating return on assets (Operating ROA) has fluctuated, with a notable decrease in FY 2023 followed by a slight improvement in FY 2024. The ratio stood at 0.41% in FY 2024, indicating that the company generated $0.41 in operating income for every $100 in assets.
- Return on assets (ROA) has also shown a mixed trend, decreasing from FY 2020 to FY 2023, before increasing slightly in FY 2024 to 1.76%. This ratio reflects the company's ability to generate profit from its total assets and has remained below the 2% mark in the latest fiscal year.
- Return on total capital has shown a downward trend from FY 2020 to FY 2024, with the ratio standing at 9.98% in the latest fiscal year. This ratio indicates that CarMax Inc generated approximately 10% return on its total invested capital.
- Return on equity (ROE) exhibited fluctuations over the five-year period, with a decline in FY 2023 followed by a slight recovery in FY 2024 to 7.89%. This ratio demonstrates the company's ability to generate profit from shareholders' equity and has shown a downward trajectory in recent years.
Overall, CarMax Inc's profitability ratios suggest varying levels of efficiency in generating profit from assets, capital, and equity over the past five years. Continued monitoring and strategic measures may be necessary to enhance profitability in the future.