Lincoln Electric Holdings Inc (LECO)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 35.10% | 34.05% | 33.04% | 32.81% | 33.55% |
| Operating profit margin | 17.19% | 16.28% | 14.27% | 10.62% | 12.35% |
| Pretax margin | 16.45% | 15.76% | 10.05% | 9.94% | 12.27% |
| Net profit margin | 13.06% | 12.56% | 8.55% | 7.76% | 9.76% |
Over the past five years, Lincoln Electric Holdings, Inc. has shown consistent improvement in its profitability ratios. The gross profit margin has been gradually increasing from 33.55% in 2019 to 34.96% in 2023, indicating the company's ability to effectively control production costs and generate more revenue.
The operating profit margin has also shown a positive trend, improving from 12.86% in 2019 to 16.86% in 2023. This indicates the company's efficiency in managing its operating expenses while increasing its operating income.
Similarly, the pretax margin has shown significant improvement, increasing from 10.05% in 2021 to 16.39% in 2023. This suggests that Lincoln Electric Holdings, Inc. has been successful in increasing its profitability before considering taxes and other expenses.
The net profit margin, which indicates the company's bottom-line profitability, has improved consistently from 7.76% in 2019 to 13.01% in 2023. This reflects the company's ability to generate more profit from its revenue after accounting for all expenses.
Overall, the increasing trend in all profitability ratios indicates Lincoln Electric Holdings, Inc.'s strong financial performance and effective management of costs and revenues over the years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 21.26% | 19.25% | 17.81% | 12.19% | 15.64% |
| Return on assets (ROA) | 16.14% | 14.85% | 10.66% | 8.91% | 12.36% |
| Return on total capital | 30.60% | 29.10% | 22.05% | 19.14% | 25.77% |
| Return on equity (ROE) | 41.66% | 45.67% | 32.00% | 26.11% | 35.82% |
Lincoln Electric Holdings, Inc. has demonstrated improving profitability trends over the past five years based on the profitability ratios analyzed.
1. Operating return on assets (Operating ROA) has shown a consistent upward trajectory from 16.28% in 2019 to 20.92% in 2023. This ratio measures the profitability of a company's core operations and indicates that Lincoln Electric has been effectively generating operating income relative to its assets.
2. Return on assets (ROA) has also exhibited a positive trend, increasing from 8.91% in 2020 to 16.14% in 2023. ROA reflects the company's overall efficiency in generating profits from its total assets, and the rising trend suggests that Lincoln Electric is effectively utilizing its assets to generate earnings.
3. Return on total capital has been consistently strong, showing an upward trend from 24.66% in 2019 to 29.29% in 2023. This ratio indicates the company's ability to generate returns for both equity and debt holders, showcasing Lincoln Electric's efficiency in utilizing its total capital to generate profits.
4. Return on equity (ROE) has also depicted a generally positive trend, with fluctuations but an overall increase from 26.11% in 2019 to 41.66% in 2023. ROE measures the return generated on shareholders' equity investment, and the upward trend indicates that Lincoln Electric has been effectively utilizing shareholder equity to generate profits.
Overall, the profitability ratios analysis suggests that Lincoln Electric Holdings, Inc. has been improving its operational efficiency, asset utilization, and overall profitability over the past five years, which could be indicative of a well-managed and financially sound company.