Martin Marietta Materials Inc (MLM)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 28.73% | 29.84% | 23.10% | 24.91% | 26.49% |
| Operating profit margin | 41.42% | 23.55% | 19.59% | 17.99% | 21.26% |
| Pretax margin | 39.72% | 22.03% | 17.71% | 15.80% | 18.80% |
| Net profit margin | 30.52% | 17.25% | 14.07% | 12.98% | 15.24% |
Based on the provided data, let's analyze the profitability ratios of Martin Marietta Materials Inc over the five-year period from 2020 to 2024.
1. Gross Profit Margin:
- The gross profit margin reflects the percentage of revenue that remains after deducting the cost of goods sold. Martin Marietta Materials' gross profit margin has fluctuated over the years, declining from 26.49% in 2020 to 23.10% in 2022, before showing an improvement to 28.73% in 2024. This indicates some variability in the company's ability to control its production costs.
2. Operating Profit Margin:
- The operating profit margin measures the percentage of sales that translate into operating income. Martin Marietta Materials' operating profit margin experienced significant fluctuations, decreasing from 21.26% in 2020 to 17.99% in 2021, before rebounding sharply to 41.42% in 2024. The steep increase in 2024 suggests the company effectively managed its operating expenses and improved operational efficiency.
3. Pretax Margin:
- The pretax margin indicates the proportion of revenue that remains as pre-tax profit. Martin Marietta Materials' pretax margin also varied, declining from 18.80% in 2020 to 15.80% in 2021, before rising to 39.72% in 2024. The significant improvement in 2024 demonstrates the company's success in generating higher profits before tax expenses.
4. Net Profit Margin:
- The net profit margin measures the efficiency of the company in generating profits after all expenses have been deducted. Martin Marietta Materials' net profit margin exhibited fluctuations, decreasing from 15.24% in 2020 to 12.98% in 2021, before increasing to 30.52% in 2024. The substantial improvement in 2024 indicates the company's ability to effectively control both operating and non-operating expenses to enhance profitability.
In conclusion, Martin Marietta Materials Inc's profitability ratios have shown variability over the five-year period, with notable improvements in operating profit margin, pretax margin, and net profit margin in 2024. This suggests that the company implemented effective cost management strategies and operational efficiencies to enhance overall profitability.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 14.90% | 10.55% | 8.05% | 6.77% | 9.50% |
| Return on assets (ROA) | 10.98% | 7.73% | 5.78% | 4.88% | 6.81% |
| Return on total capital | 29.25% | 20.57% | 15.15% | 15.27% | 17.09% |
| Return on equity (ROE) | 21.10% | 14.55% | 12.08% | 10.75% | 12.23% |
Martin Marietta Materials Inc's profitability ratios show varying trends over the years.
- Operating return on assets (Operating ROA): This ratio measures the company's operating income generated per dollar of assets. The Operating ROA has fluctuated over the years, from 9.50% in 2020 to 6.77% in 2021, then increasing to 8.05% in 2022, further rising to 10.55% in 2023, and peaking at 14.90% in 2024. This indicates an improvement in operational efficiency and asset utilization, resulting in higher returns.
- Return on assets (ROA): ROA shows the company's overall profitability in relation to its total assets. The ROA has followed a similar trend to the Operating ROA, starting at 6.81% in 2020, declining to 4.88% in 2021, then increasing to 5.78% in 2022, further rising to 7.73% in 2023, and peaking at 10.98% in 2024. This demonstrates an enhancement in the company's ability to generate profits from its assets.
- Return on total capital: This ratio indicates how effectively the company generates returns from all its capital, including debt and equity. The Return on Total Capital has shown an upward trend, from 17.09% in 2020 to 15.27% in 2021, 15.15% in 2022, a significant increase to 20.57% in 2023, and a substantial rise to 29.25% in 2024. This signifies an efficient utilization of both debt and equity to generate higher returns.
- Return on equity (ROE): This ratio measures the profitability of the company from the perspective of its shareholders. The ROE has consistently improved, starting at 12.23% in 2020, decreasing slightly to 10.75% in 2021, then rising to 12.08% in 2022, further increasing to 14.55% in 2023, and climbing to 21.10% in 2024. This indicates that the company is efficiently using shareholders' equity to generate higher returns.
Overall, the profitability ratios of Martin Marietta Materials Inc show positive trends, with improvements in operational efficiency, asset utilization, capital efficiency, and returns to shareholders over the years.