Leggett & Platt Incorporated (LEG)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 18.43% | 18.77% | 20.23% | 20.88% | 21.28% |
| Operating profit margin | -1.91% | 9.22% | 11.32% | 8.14% | 10.41% |
| Pretax margin | -3.74% | 7.75% | 10.17% | 7.57% | 8.38% |
| Net profit margin | -2.95% | 5.95% | 7.84% | 5.84% | 6.52% |
The profitability ratios for Leggett & Platt, Inc. indicate a downward trend in profitability over the past five years. The gross profit margin has decreased from 22.11% in 2019 to 18.07% in 2023, reflecting a decrease in the percentage of revenue retained after accounting for the cost of goods sold.
Similarly, the operating profit margin has declined from 10.89% in 2019 to 6.76% in 2023, indicating a decrease in the company's ability to generate profits from its core operations. The pretax margin shows a significant decline, turning negative at -3.67% in 2023, indicating that the company's profitability before tax expenses has deteriorated.
The net profit margin, representing the percentage of revenue that translates into bottom-line profit, has also decreased from 7.02% in 2019 to -2.90% in 2023. This indicates that the company's ability to generate profits after all expenses, including taxes, has worsened over the years.
Overall, the declining trend in the profitability ratios suggests that Leggett & Platt, Inc. may be facing challenges in maintaining profitability and efficiency in its operations. Further analysis of the company's cost structure, revenue streams, and operational efficiency may be needed to address these declining profitability ratios.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -1.91% | 9.25% | 10.95% | 7.34% | 10.32% |
| Return on assets (ROA) | -2.95% | 5.97% | 7.58% | 5.27% | 6.47% |
| Return on total capital | -2.72% | 14.28% | 16.04% | 13.63% | 17.05% |
| Return on equity (ROE) | -10.26% | 18.88% | 24.42% | 17.76% | 23.93% |
Leggett & Platt, Inc.'s profitability ratios indicate fluctuations over the past five years. The operating return on assets (Operating ROA) has shown a decreasing trend from 10.75% in 2019 to 6.89% in 2023, suggesting the company's operational efficiency in generating profits from its assets has declined.
On the other hand, the return on assets (ROA) has been volatile, ranging from -2.95% in 2023 to 7.58% in 2021. This indicates that the company's overall profitability relative to its total assets has been inconsistent over the period.
The return on total capital has also displayed variability, with a downward trend from 15.05% in 2019 to 9.59% in 2023. This ratio measures the company's ability to generate returns from all sources of capital, including debt and equity.
In terms of return on equity (ROE), Leggett & Platt, Inc.'s performance has been divergent, ranging from -10.26% in 2023 to 25.44% in 2019. ROE reflects the company's profitability from the perspective of its shareholders' equity.
Overall, the declining trend in some profitability ratios, along with the fluctuating nature of others, indicates that Leggett & Platt, Inc. has encountered challenges in maintaining consistent profitability and maximizing returns for its investors over the past five years.