MGM Resorts International (MGM)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 45.51% | 47.08% | 49.32% | 48.03% | 33.11% |
| Operating profit margin | 8.65% | 11.70% | -13.82% | 6.52% | -40.37% |
| Pretax margin | 6.48% | 9.11% | 6.88% | 15.10% | -29.28% |
| Net profit margin | 4.33% | 7.07% | 1.57% | 12.96% | -25.57% |
MGM Resorts International has shown significant improvement in its profitability ratios over the past few years. The gross profit margin has increased from 33.11% in December 2020 to 45.51% in December 2024, indicating the company's ability to effectively manage its cost of goods sold and generate more gross profit per dollar of revenue.
The operating profit margin has also displayed a positive trend, moving from a negative margin of -40.37% in December 2020 to 8.65% in December 2024. This suggests that MGM Resorts has been able to control its operating expenses more efficiently and enhance its operational efficiency.
Similarly, the pretax margin and net profit margin have both shown improvements over the analyzed period. The pretax margin increased from -29.28% in December 2020 to 6.48% in December 2024, indicating the company's ability to generate more profit before accounting for taxes. The net profit margin also improved significantly, rising from -25.57% in December 2020 to 4.33% in December 2024, reflecting MGM Resorts' stronger bottom-line performance after all expenses, including taxes, have been accounted for.
Overall, MGM Resorts International's profitability ratios have shown a positive trajectory, demonstrating the company's efforts to enhance operational efficiency and drive profitability over the years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.53% | 4.46% | -3.97% | 1.54% | -5.71% |
| Return on assets (ROA) | 1.77% | 2.70% | 0.45% | 3.07% | -3.62% |
| Return on total capital | 51.61% | 50.72% | -44.56% | 6.18% | -12.84% |
| Return on equity (ROE) | 24.69% | 29.97% | 4.28% | 20.66% | -20.29% |
Based on the profitability ratios of MGM Resorts International, we can observe the following trends:
1. Operating Return on Assets (Operating ROA): This ratio reflects the company's operating income generated per dollar of assets. MGM Resorts International had a negative Operating ROA in 2020 and 2022, indicating that the company was not efficiently generating operating income from its assets. However, there was a significant improvement in 2021 and 2023, with positive percentages of 1.54% and 4.46%, respectively. In 2024, the ratio slightly decreased to 3.53%.
2. Return on Assets (ROA): ROA measures the overall profitability of the company in generating profits from its assets. The trend in ROA for MGM Resorts International shows a negative figure in 2020, indicating a loss-making position. However, there was a progressive improvement in profitability in the subsequent years, reaching 3.07% in 2021, 2.70% in 2023, and 1.77% in 2024.
3. Return on Total Capital: This ratio evaluates the return generated on the total capital invested in the company. MGM Resorts International reported a significant negative return on total capital in 2022, indicating poor utilization of capital resources. However, there was a substantial recovery in 2023 and 2024, with percentages of 50.72% and 51.61%, respectively, suggesting strong returns on invested capital.
4. Return on Equity (ROE): ROE measures the profitability based on the shareholders' equity. MGM Resorts International had a negative ROE in 2020, showing that shareholders experienced a loss on their investment. The company's ROE improved significantly in the following years, reaching percentages of 20.66% in 2021, 29.97% in 2023, and 24.69% in 2024, indicating a positive trend in generating returns for equity holders.
Overall, the profitability ratios of MGM Resorts International reflect fluctuations in operational efficiency and capital utilization over the years, with improvements in profitability indicators from 2021 onwards, suggesting enhanced performance and value creation for shareholders.