Northwest Natural Gas Co (NWN)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 34.49% | 35.40% | 32.89% | 38.25% | 38.84% |
| Operating profit margin | 16.58% | 15.44% | 16.14% | 18.96% | 19.17% |
| Pretax margin | 9.54% | 10.54% | 11.13% | 12.33% | 11.81% |
| Net profit margin | 6.84% | 7.84% | 8.32% | 9.14% | 9.92% |
Northwest Natural Gas Co's profitability ratios indicate a gradual decline in margins over the years. The gross profit margin, which represents the percentage of revenue retained after deducting the cost of goods sold, decreased from 38.84% in December 2020 to 34.49% in December 2024. This trend suggests potential pressure on the company's ability to maintain profitability at the gross level.
The operating profit margin, which reflects the company's ability to generate profit from its core operations, also saw a decline from 19.17% in December 2020 to 16.58% in December 2024. This indicates challenges in managing operating expenses efficiently to sustain profitability.
Similarly, the pretax margin, which measures the proportion of earnings before taxes relative to total revenue, decreased from 11.81% in December 2020 to 9.54% in December 2024. This decline suggests potential difficulties in controlling costs and optimizing revenue streams.
Moreover, the net profit margin, which shows the percentage of net income relative to total revenue, dropped from 9.92% in December 2020 to 6.84% in December 2024. This downward trend points to challenges in maintaining bottom-line profitability after accounting for all expenses and taxes.
Overall, the decreasing trend in profitability margins for Northwest Natural Gas Co highlights the importance of closely monitoring cost management strategies, revenue generation initiatives, and operational efficiencies to improve overall profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 11.05% | 3.80% | 3.53% | 4.01% | 3.95% |
| Return on assets (ROA) | 4.56% | 1.93% | 1.82% | 1.94% | 2.04% |
| Return on total capital | 13.80% | 15.80% | 14.35% | 13.55% | 12.03% |
| Return on equity (ROE) | 5.69% | 7.31% | 7.34% | 8.41% | 8.64% |
Northwest Natural Gas Co's profitability ratios exhibit fluctuating trends over the years. The Operating Return on Assets (Operating ROA) improved from 3.95% in 2020 to 4.01% in 2021, dipped to 3.53% in 2022, before rising to 3.80% in 2023 and significantly increasing to 11.05% in 2024. This indicates that the company's operating earnings generated from its assets have been variable, with a notable improvement in 2024.
The Return on Assets (ROA) declined from 2.04% in 2020 to 1.94% in 2021, further decreased to 1.82% in 2022, slightly recovered to 1.93% in 2023, and then rose significantly to 4.56% in 2024. The downward trend from 2020 to 2022 suggests a lower level of profitability relative to the company's total assets, but the substantial increase in 2024 indicates an enhancement in this aspect.
The Return on Total Capital increased from 12.03% in 2020 to 13.55% in 2021, further rose to 14.35% in 2022, and peaked at 15.80% in 2023, before dropping to 13.80% in 2024. This ratio reflects the company's efficiency in generating returns from both debt and equity capital employed, showing a general upward trend until 2023, followed by a slight decline in 2024.
The Return on Equity (ROE) decreased from 8.64% in 2020 to 8.41% in 2021, dropped further to 7.34% in 2022, remained almost stable at 7.31% in 2023, and declined to 5.69% in 2024. The diminishing ROE over the years indicates a lower return to the shareholders for each dollar invested, with a significant decline observed in 2024.
Overall, Northwest Natural Gas Co's profitability ratios demonstrate varied performance in different years, with improvements in operating profitability in 2024 but declining returns on equity in the same period. Continued monitoring and analysis of these ratios can help in assessing the company's financial health and making informed business decisions.