MGP Ingredients Inc (MGPI)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 40.69% | 36.43% | 32.38% | 31.75% | 24.98% |
| Operating profit margin | 10.58% | 17.77% | 19.04% | 14.95% | 13.71% |
| Pretax margin | 9.73% | 16.94% | 17.92% | 19.32% | 13.30% |
| Net profit margin | 4.93% | 12.85% | 13.99% | 14.57% | 10.20% |
Based on the provided data, I have analyzed the profitability ratios of MGP Ingredients Inc over the period from December 31, 2020, to December 31, 2024.
1. Gross Profit Margin:
- The gross profit margin measures the percentage of revenue that exceeds the cost of goods sold.
- MGP Ingredients Inc's gross profit margin has shown a positive trend, increasing from 24.98% in 2020 to 40.69% in 2024.
- This improvement indicates that the company has been able to effectively control its production costs and potentially command higher pricing power.
2. Operating Profit Margin:
- The operating profit margin reflects the percentage of revenue remaining after deducting operating expenses.
- MGP Ingredients Inc's operating profit margin fluctuated over the period, peaking at 19.04% in 2022 but dropping to 10.58% in 2024.
- The decline in 2024 suggests that the company faced challenges in managing its operational costs efficiently.
3. Pretax Margin:
- The pretax margin indicates the percentage of revenue that remains as pretax profit after accounting for all expenses except for income taxes.
- MGP Ingredients Inc's pretax margin varied over the period, with a significant decrease from 19.32% in 2021 to 9.73% in 2024.
- The declining trend in pretax margin may signal difficulties in controlling expenses or generating higher revenue.
4. Net Profit Margin:
- The net profit margin represents the percentage of revenue that translates into net income after all expenses, including taxes.
- MGP Ingredients Inc's net profit margin declined from 10.20% in 2020 to 4.93% in 2024.
- The decreasing trend in net profit margin indicates that the company's bottom line profitability has been eroding, possibly due to increased expenses or declining sales.
Overall, while MGP Ingredients Inc achieved significant improvements in its gross profit margin, there are concerns about its operating efficiency and bottom-line performance as seen in the declining operating profit margin, pretax margin, and net profit margin over the period analyzed.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.29% | 10.67% | 12.86% | 9.00% | 14.80% |
| Return on assets (ROA) | 2.47% | 7.72% | 9.45% | 8.77% | 11.01% |
| Return on total capital | 9.22% | 17.45% | 19.53% | 15.20% | 20.66% |
| Return on equity (ROE) | 4.16% | 12.64% | 14.68% | 14.17% | 15.37% |
MGP Ingredients Inc's profitability ratios based on the provided data exhibit some fluctuations over the years.
1. Operating return on assets (Operating ROA) decreased from 14.80% in December 2020 to 5.29% in December 2024, showing a downward trend with a slight increase in 2022.
2. Return on assets (ROA) also saw a decline from 11.01% in December 2020 to 2.47% in December 2024, indicating decreasing efficiency in generating profit from its assets.
3. Return on total capital decreased from 20.66% in December 2020 to 9.22% in December 2024, highlighting a declining trend in the return the company is able to generate on its total invested capital.
4. Return on equity (ROE) declined from 15.37% in December 2020 to 4.16% in December 2024, indicating a decreasing trend in the return the company is able to generate for its equity shareholders.
Overall, MGP Ingredients Inc's profitability ratios generally decreased over the years, which may suggest challenges in efficiently utilizing assets and capital to generate profits and returns for its shareholders. Further analysis and context on the company's strategies and industry conditions would provide deeper insights into these trends.