Louisiana-Pacific Corporation (LPX)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 28.29% | 22.98% | 38.87% | 50.14% | 34.72% |
| Operating profit margin | 18.02% | 11.12% | 32.43% | 44.29% | 25.64% |
| Pretax margin | 19.04% | 9.76% | 35.29% | 45.44% | 25.84% |
| Net profit margin | 14.28% | 6.90% | 28.18% | 35.17% | 20.80% |
Louisiana-Pacific Corporation has displayed fluctuations in its profit margins over the past five years. The gross profit margin increased from 34.72% in 2020 to 50.14% in 2021, indicating improved efficiency in managing production costs. However, there was a decline in 2022 to 38.87% and a further drop to 22.98% in 2023, which suggests challenges in maintaining profitability from sales.
Similarly, the operating profit margin showed a similar trend, with a substantial increase from 25.64% in 2020 to 44.29% in 2021, reflecting strong operational performance. However, there was a sharp decline to 11.12% in 2023, signaling possible issues in controlling operating expenses.
The pretax margin also exhibited fluctuations, starting at 25.84% in 2020, reaching a peak of 45.44% in 2021, and then declining to 9.76% in 2023. This indicates varying levels of pre-tax profitability over the years.
The net profit margin, a key indicator of overall profitability, saw a similar pattern of volatility. It increased from 20.80% in 2020 to 35.17% in 2021 but then dropped to 6.90% in 2023. The net profit margin rebounded slightly to 14.28% in 2024, suggesting potential efforts to enhance bottom-line performance.
In conclusion, Louisiana-Pacific Corporation's profitability ratios have experienced fluctuations, indicating the company's need for consistent efforts to manage costs, improve operational efficiency, and sustain profitability in the long term.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 20.63% | 11.78% | 53.19% | 79.03% | 29.48% |
| Return on assets (ROA) | 16.35% | 7.30% | 46.21% | 62.76% | 23.92% |
| Return on total capital | 28.43% | 14.13% | 77.23% | 113.47% | 40.27% |
| Return on equity (ROE) | 25.13% | 11.43% | 75.79% | 111.50% | 40.44% |
Louisiana-Pacific Corporation's profitability ratios exhibit fluctuations over the period from December 31, 2020, to December 31, 2024.
1. Operating Return on Assets (Operating ROA) saw a significant increase from 29.48% in 2020 to 79.03% in 2021, indicating that the company was able to generate more operating profit per dollar of assets in 2021. The ratio then decreased to 53.19% in 2022, followed by a further decline to 11.78% in 2023, and a slight increase to 20.63% in 2024.
2. Return on Assets (ROA) also showed a similar trend, starting at 23.92% in 2020, increasing to 62.76% in 2021, but dropping to 46.21% in 2022, and then declining even further to 7.30% in 2023 before slightly improving to 16.35% in 2024. This indicates that the company's ability to generate profit from its assets fluctuated during the period.
3. Return on Total Capital experienced a sharp increase from 40.27% in 2020 to 113.47% in 2021, before decreasing to 77.23% in 2022, and then dropping significantly to 14.13% in 2023, and slightly recovering to 28.43% in 2024. This ratio reflects the company's ability to generate returns from both debt and equity investments.
4. Return on Equity (ROE) also followed a similar pattern, with a substantial rise from 40.44% in 2020 to 111.50% in 2021, a decline to 75.79% in 2022, a significant drop to 11.43% in 2023, and a slight improvement to 25.13% in 2024. ROE indicates how well the company is utilizing shareholders' equity to generate profit.
Overall, the varying trends in these profitability ratios suggest that Louisiana-Pacific Corporation's profitability performance was volatile during the period under review, with fluctuations in the company's ability to generate profit from assets, capital, and shareholders' equity.