Nordson Corporation (NDSN)
Profitability ratios
Return on sales
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 21.27% | 24.27% | 22.75% | 54.13% | 55.55% |
| Operating profit margin | 26.20% | 27.35% | 26.33% | 16.74% | 22.51% |
| Pretax margin | 23.96% | 25.28% | 24.58% | 14.44% | 20.09% |
| Net profit margin | 18.98% | 19.98% | 19.45% | 11.95% | 15.71% |
Based on the profitability ratios provided, Nordson Corp.'s gross profit margin has shown a slight decline from 56.05% in 2021 to 54.23% in 2023. This decrease suggests a potential reduction in the company's ability to generate profit from its sales after accounting for the cost of goods sold. Similarly, the operating profit margin has shown a decline compared to the previous year, indicating a decrease in operating efficiency or an increase in operating expenses.
Furthermore, the pretax margin, which measures the company's ability to generate profit before tax expenses, has also decreased from 24.31% in 2021 to 23.41% in 2023, implying a potential impact of higher tax expenses or reduced operating income. Finally, the net profit margin has shown a declining trend from 19.23% in 2021 to 18.55% in 2023, reflecting a decrease in the company's ability to generate profit after accounting for all expenses, including taxes and interest.
Overall, Nordson Corp.'s profitability ratios indicate a downward trend in its ability to generate profits from its core operations, which may raise concerns about its future financial performance and efficiency.
Return on investment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 12.81% | 18.38% | 16.23% | 9.51% | 13.74% |
| Return on assets (ROA) | 9.28% | 13.43% | 11.99% | 6.79% | 9.59% |
| Return on total capital | 15.99% | 25.45% | 20.39% | 11.80% | 18.00% |
| Return on equity (ROE) | 18.76% | 22.36% | 21.04% | 14.19% | 21.32% |
Nordson Corp.'s profitability ratios have exhibited fluctuations over the past five years. The operating return on assets (Operating ROA) decreased from 18.38% in 2022 to 12.81% in 2023, reflecting a decline in the company's ability to generate operating income from its assets. The return on assets (ROA) followed a similar trend, decreasing from 13.43% in 2022 to 9.28% in 2023, indicating a reduction in the company's overall profit generation from its assets.
On the other hand, the return on total capital and return on equity (ROE) also experienced a decline in 2023 compared to the previous year. The return on total capital decreased from 23.04% in 2022 to 15.46% in 2023, while the ROE decreased from 22.36% in 2022 to 18.76% in 2023. These decreases suggest that Nordson Corp.'s profitability in relation to its total capital and equity diminished in the most recent fiscal year.
Overall, the decreasing trend in profitability ratios may indicate a potential weakening in Nordson Corp.'s ability to generate returns from its assets, capital, and equity in 2023 compared to the previous year. It would be essential for stakeholders to further analyze the company's financial performance and the factors contributing to these declines.