MGP Ingredients Inc (MGPI)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 36.72% | 32.60% | 31.95% | 25.12% | 21.16% |
| Operating profit margin | 17.91% | 19.17% | 20.29% | 13.79% | 13.06% |
| Pretax margin | 17.12% | 18.12% | 19.53% | 13.37% | 12.70% |
| Net profit margin | 12.95% | 14.09% | 14.66% | 10.26% | 10.73% |
Over the past five years, MGP Ingredients, Inc. has shown a consistent improvement in its profitability ratios. The gross profit margin has steadily increased from 21.10% in 2019 to 36.43% in 2023, indicating the company's ability to generate more profit from its sales after deducting the cost of goods sold.
Similarly, the operating profit margin has also shown an upward trend, reflecting the company's efficiency in controlling its operating expenses. It increased from 13.02% in 2019 to 20.89% in 2023, highlighting the company's improved profitability at the operating level.
The pretax margin, which measures the company's profitability before considering taxes, fluctuated over the years, but overall, it experienced an increase from 12.66% in 2019 to 16.94% in 2023. This indicates that MGP Ingredients, Inc. has been able to better manage its pre-tax profitability.
Lastly, the net profit margin, a key indicator of overall profitability, has also shown a positive trend, increasing from 10.62% in 2019 to 12.72% in 2023. This suggests that the company has been successful in improving its bottom line profitability after accounting for all expenses, including taxes.
Overall, the improving trend in all profitability ratios indicates that MGP Ingredients, Inc. has been successful in enhancing its overall profitability and efficiency in generating profits over the past five years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.67% | 12.86% | 12.13% | 14.80% | 14.64% |
| Return on assets (ROA) | 7.72% | 9.45% | 8.77% | 11.01% | 12.03% |
| Return on total capital | 13.15% | 18.84% | 18.47% | 18.24% | 17.39% |
| Return on equity (ROE) | 12.64% | 14.66% | 14.16% | 15.37% | 16.79% |
MGP Ingredients, Inc. has shown consistent performance in terms of profitability ratios over the past five years.
1. Operating return on assets (Operating ROA) has fluctuated slightly but remained relatively stable between 10.41% and 14.80%. This ratio indicates the company's efficiency in generating operating income relative to its total assets.
2. Return on assets (ROA) has shown more variability, ranging from 7.64% to 11.95%. This metric assesses the company's overall profitability in relation to its total assets, reflecting the ability to generate profits from its asset base.
3. Return on total capital has also demonstrated fluctuation but generally stayed within a range of 12.35% to 17.94%. This ratio evaluates the company's overall profitability in relation to its total invested capital, including both equity and debt.
4. Return on equity (ROE) has exhibited a decreasing trend over the years, declining from 16.68% in 2019 to 12.51% in 2023. ROE reflects the return earned by the shareholders on their equity investment in the company.
Overall, MGP Ingredients, Inc. has maintained healthy profitability ratios, with strong performance in generating returns on assets and total capital. However, the decreasing trend in return on equity may warrant further analysis to understand the factors contributing to this decline.