National Fuel Gas Company (NFG)

Gross profit margin

		Sep 30, 2023	Sep 30, 2022	Sep 30, 2021	Sep 30, 2020	Sep 30, 2019
Gross profit	US$ in thousands	1,616,520	1,665,200	1,450,780	1,203,380	1,551,570
Revenue	US$ in thousands	2,173,770	2,186,050	1,742,660	1,546,290	1,693,330
Gross profit margin		74.36%	76.17%	83.25%	77.82%	91.63%

September 30, 2023 calculation

Gross profit margin = Gross profit ÷ Revenue
= $1,616,520K ÷ $2,173,770K
= 74.36%

The gross profit margin is a key financial ratio that indicates a company's ability to generate profit from its core operations. For National Fuel Gas Co., the trend in the gross profit margin over the past five years shows fluctuations that can be attributed to various factors impacting the company's cost of goods sold and revenue.

In 2019, the gross profit margin was 67.06%, indicating that the company retained approximately 67.06% of its revenue after accounting for the cost of goods sold. The subsequent year, in 2020, the gross profit margin decreased to 73.17%, reflecting an improvement in the company's ability to manage its production and sales costs, resulting in higher retained revenue.

However, in 2021, there was a significant surge in the gross profit margin to 90.14%, demonstrating a substantial increase in retained revenue relative to the cost of goods sold. This improvement may have been influenced by factors such as effective cost management, favorable pricing strategies, or increased revenue generation.

The following year, in 2022, the gross profit margin decreased to 82.06%, indicating a slight decrease in retained revenue as a percentage of sales. This reduction suggests potential challenges in managing production costs or changes in the pricing environment.

In 2023, the gross profit margin further declined to 79.87%. This decrease may raise concerns about the company's ability to maintain profitability as a result of factors such as rising production costs or pricing pressures in the market.

In summary, the fluctuations in National Fuel Gas Co.'s gross profit margin over the five-year period reflect changes in the company's ability to control production costs and generate revenue. The decreasing trend in recent years warrants further analysis to identify and address the factors impacting the company's profitability.