Mercer International Inc (MERC)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | -14.93% | 14.32% | 14.29% | 9.84% | 10.31% |
| Operating profit margin | -9.92% | 17.63% | 20.22% | 4.80% | 5.47% |
| Pretax margin | -14.18% | 15.51% | 15.20% | -0.84% | 0.62% |
| Net profit margin | -12.72% | 11.10% | 9.98% | -1.30% | -0.63% |
Mercer International Inc.'s profitability ratios have fluctuated over the past five years. The gross profit margin decreased significantly from 30.92% in 2021 to 7.04% in 2023, indicating a decline in the company's ability to generate profits after accounting for the cost of goods sold.
Similarly, the operating profit margin also showed a considerable drop from 19.22% in 2021 to -7.78% in 2023, suggesting that the company's profitability from its core operations has deteriorated. This negative operating profit margin raises concerns about the efficiency of Mercer International's operational management.
The pretax margin and net profit margin both experienced negative trends in 2023, reflecting a decline in profitability before and after accounting for taxes and other expenses. The negative net profit margin in particular, which decreased from 9.48% in 2021 to -12.14% in 2023, indicates that the company is experiencing losses on its bottom line.
Overall, Mercer International Inc.'s downward trend in profitability ratios over the past few years may be a cause for concern for investors and stakeholders, suggesting potential challenges in the company's financial performance and sustainability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -7.09% | 14.40% | 14.74% | 2.99% | 4.07% |
| Return on assets (ROA) | -9.09% | 9.07% | 7.27% | -0.81% | -0.47% |
| Return on total capital | -8.41% | 17.95% | 17.94% | 3.56% | 5.13% |
| Return on equity (ROE) | -38.09% | 29.45% | 24.64% | -2.87% | -1.75% |
Mercer International Inc.'s profitability ratios show varying performance over the past five years. Starting with the Operating return on assets (Operating ROA), the company experienced a significant decrease from 14.40% in 2022 to -5.82% in 2023, indicating a decline in the ability to generate profit from its assets through its core operations.
The Return on assets (ROA) also followed a negative trend, with a notable decline from 9.07% in 2022 to -9.09% in 2023. This indicates that the company's overall profitability relative to its total assets deteriorated significantly in 2023.
The Return on total capital, which measures the efficiency of using all of the company's capital employed, decreased from 17.89% in 2022 to -6.88% in 2023. This suggests a decline in the company's ability to generate returns on the total capital invested in its operations.
Similarly, the Return on equity (ROE) plummeted from 29.45% in 2022 to -38.09% in 2023, reflecting a substantial decrease in the company's capability to generate profit for its shareholders relative to the equity invested.
Overall, based on the downward trends in profitability ratios in 2023 compared to previous years, it appears that Mercer International Inc. faced challenges in profitability and efficiency in utilizing its assets and capital during the period.