LKQ Corporation (LKQ)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 39.09% | 40.21% | 40.82% | 40.67% | 39.50% |
| Operating profit margin | 8.35% | 9.79% | 12.36% | 11.26% | 8.48% |
| Pretax margin | 6.67% | 8.91% | 11.86% | 10.69% | 7.61% |
| Net profit margin | 4.77% | 6.75% | 8.98% | 8.34% | 5.49% |
Based on the provided data for LKQ Corporation, we can analyze the profitability ratios as follows:
1. Gross Profit Margin:
- The gross profit margin has been relatively stable over the years, ranging from 39.50% in 2020 to 40.82% in 2022.
- In 2024, there was a slight decrease to 39.09%, indicating potential challenges in managing the cost of goods sold relative to sales revenue.
2. Operating Profit Margin:
- The operating profit margin has shown some fluctuation, with a significant increase from 8.48% in 2020 to 12.36% in 2022.
- However, there was a decline in 2024 to 8.35%, which may suggest operational inefficiencies impacting profitability.
3. Pretax Margin:
- The pretax margin has also exhibited variability over the years, with a notable peak of 11.86% in 2022.
- The decline to 6.67% in 2024 could indicate factors such as changes in tax rates or expenses impacting pre-tax profitability.
4. Net Profit Margin:
- The net profit margin reflects the company's bottom-line profitability after accounting for all expenses and taxes.
- LKQ Corporation experienced a decrease in net profit margin from 8.98% in 2022 to 4.77% in 2024, suggesting challenges in managing expenses and maintaining profitability.
In summary, while LKQ Corporation has shown fluctuating profitability margins over the years, there are indications of both improvements and potential challenges in managing costs, operations, and overall profitability. Monitoring these ratios closely can provide insights into the company's financial performance and efficiency in generating profits.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.02% | 9.00% | 13.13% | 11.70% | 7.97% |
| Return on assets (ROA) | 4.58% | 6.21% | 9.54% | 8.65% | 5.17% |
| Return on total capital | 20.28% | 23.11% | 26.44% | 25.48% | 17.61% |
| Return on equity (ROE) | 11.38% | 15.18% | 21.07% | 18.90% | 11.29% |
From the provided data, we can analyze the profitability ratios of LKQ Corporation over the past five years.
1. Operating return on assets (Operating ROA):
- The Operating ROA has shown a consistent improvement from 7.97% in 2020 to 13.13% in 2022, indicating that the company's operating performance in generating profits from its assets has been on an upward trend. However, there was a slight dip to 9.00% in 2023 and further to 8.02% in 2024.
2. Return on assets (ROA):
- The ROA also demonstrates an increasing trend from 5.17% in 2020 to 9.54% in 2022, suggesting that LKQ Corporation has been effective in utilizing its assets to generate profit. However, there was a decline to 6.21% in 2023 and a further decrease to 4.58% in 2024.
3. Return on total capital:
- The return on total capital has been consistently strong, with a steady growth from 17.61% in 2020 to 26.44% in 2022. This indicates that the company has been efficient in generating returns for both debt and equity providers. However, there was a slight decrease to 20.28% in 2024.
4. Return on equity (ROE):
- The ROE has also shown a positive trend, increasing from 11.29% in 2020 to 21.07% in 2022, reflecting the company's ability to generate profits for its shareholders. Nonetheless, there was a decline to 15.18% in 2023 and a further drop to 11.38% in 2024.
Overall, LKQ Corporation has generally demonstrated improvement in its profitability ratios over the years, indicating effective asset utilization and generating satisfactory returns for both shareholders and providers of capital. However, there have been fluctuations in some ratios, which may warrant further analysis to identify underlying factors influencing the company's profitability performance.