National Presto Industries Inc (NPK)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 20.24% | 19.79% | 17.14% | 18.10% | 24.08% |
| Operating profit margin | 11.65% | 10.28% | 10.17% | 8.44% | 15.94% |
| Pretax margin | 13.05% | 12.45% | 8.07% | 9.12% | 17.01% |
| Net profit margin | 10.68% | 10.14% | 6.44% | 7.21% | 13.32% |
Based on the provided data for National Presto Industries Inc, let's analyze the profitability ratios over the period from December 31, 2020, to December 31, 2024:
1. Gross Profit Margin:
- The gross profit margin shows the percentage of revenue that exceeds the cost of goods sold. National Presto Industries Inc's gross profit margin decreased from 24.08% in 2020 to 17.14% in 2022, indicating a decline in the efficiency of production or pricing strategies. However, there was a slight improvement to 20.24% by the end of 2024, suggesting potential recovery.
2. Operating Profit Margin:
- The operating profit margin reflects the efficiency of the company's core operations. National Presto Industries Inc's operating profit margin decreased from 15.94% in 2020 to 8.44% in 2021, showing a significant decline in operational efficiency. Despite some improvements over the following years, the operating profit margin remained lower than the initial level, indicating ongoing challenges in managing operating expenses.
3. Pre-tax Margin:
- The pre-tax margin represents the percentage of revenue that remains after accounting for all operating expenses but before taxes. National Presto Industries Inc's pre-tax margin fluctuated over the period, with a notable drop from 17.01% in 2020 to 8.07% in 2022, before rebounding to 13.05% in 2024. This indicates fluctuations in the company's ability to generate profits before tax obligations.
4. Net Profit Margin:
- The net profit margin reflects the company's overall profitability after all expenses have been deducted, including taxes. National Presto Industries Inc's net profit margin declined from 13.32% in 2020 to 6.44% in 2022, indicating a significant decrease in profits relative to revenue. However, the margin improved to 10.68% by the end of 2024, signaling a partial recovery in overall profitability.
Overall, the profitability ratios of National Presto Industries Inc show fluctuations and challenges over the analyzed period, with varying levels of margin decline and recovery. Management should continue to analyze the factors contributing to these changes in profitability and take necessary actions to improve operational efficiency and 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) | 9.97% | 7.95% | 7.94% | 7.14% | 12.97% |
| Return on assets (ROA) | 9.14% | 7.84% | 5.03% | 6.10% | 10.84% |
| Return on total capital | 0.00% | 9.83% | 7.74% | 8.40% | 15.01% |
| Return on equity (ROE) | 11.28% | 9.70% | 5.95% | 7.17% | 12.54% |
The profitability ratios of National Presto Industries Inc show varying trends over the years.
1. Operating Return on Assets (Operating ROA) decreased from 12.97% in 2020 to 7.94% in 2022, then slightly increased to 9.97% in 2024. This indicates that the company's ability to generate profits from its operations relative to its total assets initially declined and then improved in the later years.
2. Return on Assets (ROA) declined from 10.84% in 2020 to 5.03% in 2022, followed by an increase to 9.14% in 2024. This ratio reflects the company's overall profitability in generating earnings from its total assets, showing a decrease and then an improvement over the period.
3. Return on Total Capital decreased from 15.01% in 2020 to 7.74% in 2022 and then increased to 0.00% in 2024, which is an unusual figure. This ratio reflects the company's ability to generate returns from all of its capital sources, and the drop in 2022 followed by the steep decrease to zero in 2024 is a point of concern that requires further investigation.
4. Return on Equity (ROE) saw a decline from 12.54% in 2020 to 5.95% in 2022, then improved to 11.28% in 2024. ROE signifies the return earned on shareholders' equity, and the fluctuating trend indicates changes in how effectively the company is utilizing shareholders' investments to generate profits.
In conclusion, while the Operating ROA and ROA ratios showed some improvement in the later years, the Return on Total Capital and ROE ratios exhibited a mix of declining and recovering profitability trends. It is essential for investors and stakeholders to monitor these ratios closely to understand the company's overall profitability performance and financial health.