Lincoln Electric Holdings Inc (LECO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 36.74% | 35.25% | 34.05% | 33.04% | 32.81% |
| Operating profit margin | 15.88% | 17.13% | 16.28% | 11.04% | 10.62% |
| Pretax margin | 14.82% | 16.39% | 15.76% | 10.05% | 9.94% |
| Net profit margin | 11.63% | 13.01% | 12.56% | 8.55% | 7.76% |
The profitability ratios of Lincoln Electric Holdings Inc have shown a steady improvement over the past five years.
1. Gross Profit Margin: The company's gross profit margin has increased from 32.81% in 2020 to 36.74% in 2024. This indicates that Lincoln Electric has been able to effectively manage its production costs and increase the profitability of its core operations.
2. Operating Profit Margin: The operating profit margin of the company has shown fluctuations but generally an increasing trend, rising from 10.62% in 2020 to 15.88% in 2024. This suggests that Lincoln Electric has been successful in controlling its operating expenses and improving operational efficiency.
3. Pretax Margin: Lincoln Electric's pretax margin has consistently increased over the years, from 9.94% in 2020 to 14.82% in 2024. This indicates that the company has been able to generate higher earnings before taxes relative to its total revenue.
4. Net Profit Margin: The net profit margin has also shown a positive trend, increasing from 7.76% in 2020 to 11.63% in 2024. This demonstrates that Lincoln Electric has been able to effectively manage its taxes and other expenses to enhance its bottom line profitability.
Overall, the increasing profitability margins reflect Lincoln Electric's ability to efficiently manage its costs, improve operational efficiency, and generate higher profits over the 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) | 18.08% | 21.26% | 19.25% | 13.77% | 12.19% |
| Return on assets (ROA) | 13.24% | 16.14% | 14.85% | 10.67% | 8.91% |
| Return on total capital | 47.98% | 56.39% | 60.16% | 68.77% | 41.74% |
| Return on equity (ROE) | 35.11% | 41.66% | 45.67% | 32.01% | 26.08% |
Over the last five years, Lincoln Electric Holdings Inc has demonstrated consistent improvement in its profitability ratios.
1. Operating return on assets (Operating ROA) has seen a steady increase from 12.19% in 2020 to 21.26% in 2023 before slightly decreasing to 18.08% in 2024. This indicates the company's ability to generate operating income from its assets has been strong, particularly in 2023.
2. Return on assets (ROA) has also shown a positive trend, rising from 8.91% in 2020 to 16.14% in 2023, with a slight dip to 13.24% in 2024. This ratio reflects the company's overall profitability in relation to its total assets, and the increasing values suggest efficient asset utilization and improved profitability.
3. Return on total capital has fluctuated but maintained relatively high levels, starting at 41.74% in 2020, peaking at 68.77% in 2021, and gradually declining to 47.98% in 2024. This ratio signifies the company's ability to generate earnings in relation to both debt and equity capital invested.
4. Return on equity (ROE) has also shown a positive trajectory, increasing from 26.08% in 2020 to a peak of 45.67% in 2022, before decreasing slightly to 35.11% in 2024. This indicates the company's ability to generate profits from shareholders' equity and reflects strong financial performance and efficient use of equity.
Overall, the profitability ratios of Lincoln Electric Holdings Inc demonstrate improving operational efficiency, effective utilization of assets and capital, and strong performance in generating returns for both shareholders and investors over the analyzed period.