MillerKnoll Inc (MLKN)
Profitability ratios
Return on sales
| Jun 3, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | Jun 1, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 17.65% | 17.25% | 19.35% | 18.37% | 18.15% |
| Operating profit margin | 1.51% | 0.51% | 4.73% | -0.76% | 3.97% |
| Pretax margin | 0.58% | -0.20% | 4.53% | -0.05% | 3.91% |
| Net profit margin | 0.52% | -0.35% | 3.55% | -0.18% | 3.13% |
MillerKnoll Inc's profitability ratios provide insights into the company's ability to generate profits relative to its revenue and operating costs. The gross profit margin, which measures the percentage of revenue remaining after deducting the cost of goods sold, has shown a slight fluctuation over the past five years, ranging from 34.28% to 38.51%. This indicates that the company has been able to effectively manage its production and distribution costs, although there was a slight decrease in the most recent year compared to the previous year.
Moving on to the operating profit margin, which reflects the efficiency of the company's operations in generating profits before interest and taxes, there is a notable fluctuation in the ratios. While it was 9.46% and 7.78% in 2021 and 2020, respectively, it declined significantly to 1.01% in 2022, but rebounded to 4.84% in 2023. This fluctuation suggests that MillerKnoll Inc experienced challenges in controlling its operating expenses in 2022, but managed to improve its operational efficiency in the following year.
Examining the pretax margin, which indicates the proportion of each dollar of revenue that represents pre-tax profit, the ratios have been volatile, ranging from -0.34% to 9.20%. The negative pretax margin in 2020 and 2019 reflects that the company had pre-tax losses in those years, while it notably rebounded in 2021. However, in 2023, the pretax margin was at 1.24%, suggesting that the company still has room for improvement in maximizing pre-tax profits.
Finally, the net profit margin, which measures the proportion of revenue that represents net income, has also fluctuated over the five-year period, with values ranging from -0.69% to 7.02%. Although there was a significant improvement in 2023 compared to 2022, the net profit margin remains relatively low, indicating that the company has not been as efficient in controlling non-operating expenses and taxes in relation to its revenue.
In conclusion, while MillerKnoll Inc has been able to maintain a reasonable gross profit margin, there have been fluctuations in the operating, pretax, and net profit margins. The company may need to focus on improving its operational efficiency, controlling operating expenses, and maximizing net income to ensure sustainable profitability in the future.
Return on investment
| Jun 3, 2023 | May 28, 2022 | May 29, 2021 | May 30, 2020 | Jun 1, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.86% | 0.88% | 11.20% | -1.85% | 12.97% |
| Return on assets (ROA) | 0.98% | -0.60% | 8.41% | -0.42% | 10.23% |
| Return on total capital | 4.31% | 0.78% | 20.86% | 0.83% | 21.20% |
| Return on equity (ROE) | 2.94% | -1.90% | 20.29% | -1.33% | 22.32% |
MillerKnoll Inc's profitability ratios provide insights into the company's ability to generate profits from its assets and capital. Let's analyze each ratio to understand the company's profitability performance over the past five years.
1. Operating Return on Assets (Operating ROA):
This ratio measures the company's operating income generated per dollar of assets. MillerKnoll Inc's Operating ROA has shown fluctuations over the years, from 13.62% in 2019 to 0.88% in 2022 and then experiencing a significant improvement to 4.63% in 2023. The declining trend from 2019 to 2022 and subsequent improvement suggest fluctuations in the company's operational efficiency and profitability.
2. Return on Assets (ROA):
ROA assesses the company's overall ability to generate profit from its assets. Despite the negative ROA in 2020 and 2022, MillerKnoll Inc demonstrated positive performance in 2021 and 2023, with the ratio reaching 8.40% and 0.98% respectively. The company's ability to turn its assets into profits improved in 2021 compared to 2019 and 2020. The negative ROA in 2020 and 2022 suggests potential inefficiencies in utilizing assets to generate earnings.
3. Return on Total Capital:
This ratio measures the efficiency of the company in generating returns from both equity and debt capital invested. MillerKnoll Inc's return on total capital showed a similar trend to Operating ROA and ROA, with a decline from 21.85% in 2019 to 1.40% in 2022, followed by an improvement to 6.96% in 2023. The declining trend suggests potential challenges in efficiently utilizing the company's capital to generate profits.
4. Return on Equity (ROE):
ROE reflects the profitability of the company from the perspective of its shareholders. MillerKnoll Inc's ROE displayed a declining trend from 2019 to 2022, with negative values in 2020 and 2022. However, the ratio improved to 2.94% in 2023. The negative ROE in 2020 and 2022 indicates a potential decline in the company's ability to generate profits attributable to shareholders' equity.
Overall, the fluctuating and, at times, negative profitability ratios suggest that MillerKnoll Inc has encountered challenges in consistently generating profits from its assets and capital. The company may need to focus on improving operational efficiency and optimizing its capital utilization to enhance its overall profitability in the future.