Mohawk Industries Inc (MHK)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 24.53% | 25.22% | 29.36% | 25.62% | 26.93% |
| Operating profit margin | -2.61% | 2.09% | 11.99% | 6.70% | 8.33% |
| Pretax margin | -3.21% | 1.57% | 11.58% | 6.16% | 7.54% |
| Net profit margin | -3.98% | 0.22% | 9.28% | 5.43% | 7.49% |
Mohawk Industries, Inc.'s profitability ratios have shown a declining trend over the past five years. The gross profit margin has decreased from 29.18% in 2021 to 24.33% in 2023, indicating a decrease in the company's ability to generate profit from its core business operations.
Similarly, the operating profit margin has decreased from 11.92% in 2021 to 5.30% in 2023, reflecting a decline in the company's ability to generate profit after accounting for operating expenses. The pretax margin has also shown a significant decrease, moving from 11.52% in 2021 to -3.18% in 2023, which indicates that the company's profitability before taxes has deteriorated.
The net profit margin, which represents the company's bottom line profitability, has also decreased from 9.22% in 2021 to -3.95% in 2023. This suggests that after accounting for all expenses, including taxes, Mohawk Industries, Inc. is experiencing a loss.
Overall, the decreasing trend in profitability ratios for Mohawk Industries, Inc. signals potential challenges in managing costs, pricing strategies, or overall operational efficiency, which may require further analysis and strategic adjustments to improve the company's profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -2.12% | 1.73% | 9.39% | 4.44% | 6.18% |
| Return on assets (ROA) | -3.24% | 0.18% | 7.26% | 3.60% | 5.56% |
| Return on total capital | -2.97% | 2.36% | 13.31% | 5.85% | 8.20% |
| Return on equity (ROE) | -5.77% | 0.32% | 12.27% | 6.04% | 9.17% |
The profitability ratios of Mohawk Industries, Inc. have shown some fluctuations over the past five years.
1. Operating Return on Assets (Operating ROA): This ratio indicates the company's ability to generate profits from its assets before interest and taxes. Mohawk Industries' Operating ROA has declined from 9.39% in 2021 to 4.35% in 2023, possibly indicating a decrease in operational efficiency or profitability.
2. Return on Assets (ROA): ROA measures how efficiently a company is using its assets to generate earnings. Mohawk Industries' ROA has been inconsistent, ranging from a negative figure of -3.24% in 2023 to a peak of 7.26% in 2021. The negative ROA in 2023 may raise concerns regarding the company's asset utilization and profitability.
3. Return on Total Capital: This ratio evaluates the return generated by the company from all its capital sources. Mohawk Industries' Return on Total Capital has fluctuated over the years, with a decrease from 12.42% in 2021 to 5.71% in 2023. This decline may suggest that the company's overall capital efficiency has reduced in recent years.
4. Return on Equity (ROE): ROE measures the return earned on the shareholders' equity invested in the company. Mohawk Industries' ROE has also shown variability, with a negative figure of -5.77% in 2023 and a peak of 12.27% in 2021. The negative ROE in 2023 indicates that the company may not be efficiently utilizing shareholders' equity to generate profits.
In conclusion, Mohawk Industries, Inc. has experienced fluctuations in its profitability ratios over the past five years, indicating some challenges in maintaining consistent profitability and efficient utilization of assets and capital. Further analysis and examination of the company's financial performance and operating strategies may be required to address the issues highlighted by the ratios.