Liquidity Services Inc (LQDT)
Profitability ratios
Return on sales
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 50.43% | 54.22% | 57.29% | 58.07% | 53.06% |
| Operating profit margin | 6.37% | 8.22% | 16.90% | 10.53% | -1.88% |
| Pretax margin | 7.42% | 9.14% | 16.99% | 10.69% | -1.44% |
| Net profit margin | 5.44% | 6.61% | 14.38% | 19.74% | -1.82% |
The profitability ratios of Liquidity Services Inc show fluctuating trends over the past five years. The gross profit margin has declined gradually from 57.29% in 2022 to 50.43% in 2024, which may indicate increasing costs of goods sold relative to revenue. The operating profit margin also decreased from 16.90% in 2022 to 6.37% in 2024, suggesting that operating expenses have been relatively high compared to revenue in recent years.
Despite these declines, the company has maintained positive pretax and net profit margins over the period, with some fluctuations. The pretax margin decreased from 16.99% in 2022 to 7.42% in 2024, likely due to a combination of lower gross and operating margins. Similarly, the net profit margin decreased from 19.74% in 2021 to 5.44% in 2024, indicating fluctuations in the company's bottom-line profitability.
Overall, the declining trend in profitability ratios, especially in gross and operating profit margins, suggests that Liquidity Services Inc may need to focus on controlling costs and improving operational efficiency to enhance its overall profitability in the future.
Return on investment
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.75% | 9.03% | 16.45% | 10.63% | -1.98% |
| Return on assets (ROA) | 5.76% | 7.26% | 14.00% | 19.93% | -1.92% |
| Return on total capital | 12.82% | 16.16% | 30.68% | 20.12% | -3.49% |
| Return on equity (ROE) | 10.95% | 12.99% | 26.09% | 37.74% | -3.38% |
Liquidity Services Inc has displayed varying levels of profitability over the past five years based on the provided ratios.
The Operating Return on Assets (Operating ROA) shows the company's ability to generate operating profits relative to its total assets. The trend indicates a gradual decrease from 16.45% in 2022 to 6.75% in 2024. This may suggest decreasing operational efficiency in utilizing its assets to generate profits.
The Return on Assets (ROA) ratio reflects the overall profitability of the company irrespective of financing structures. Liquidity Services Inc had a peak in 2019 with an ROA of 19.93% but has shown a downward trend since then, reaching 5.76% in 2024. This indicates a lower ability to generate profits from its total assets in recent years.
Return on Total Capital represents the company's ability to generate returns from all capital invested in the business. Liquidity Services Inc has shown a decreasing trend from 30.68% in 2022 to 12.82% in 2024. This may be a result of less efficient capital utilization or changes in the company's financial structure.
Return on Equity (ROE) measures the return the company generates on shareholders' equity. Liquidity Services Inc's ROE has displayed a similar declining pattern, from 37.74% in 2021 to 10.95% in 2024. This indicates a decreasing ability to generate profits for its shareholders relative to their equity ownership in the company.
In summary, Liquidity Services Inc's profitability ratios have generally shown a declining trend, implying potential challenges in generating profits relative to its asset base, total capital, and shareholder equity. Further analysis may be needed to identify the specific reasons for the decline and to develop strategies for improvement.