Penske Automotive Group Inc (PAG)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 16.75% | 17.43% | 17.36% | 15.59% | 14.91% |
| Operating profit margin | 4.59% | 5.36% | 5.30% | 3.45% | 2.82% |
| Pretax margin | 4.80% | 6.67% | 6.27% | 3.46% | 2.56% |
| Net profit margin | 3.58% | 4.97% | 4.64% | 2.66% | 1.88% |
Penske Automotive Group Inc's profitability ratios have shown a general positive trend over the years, indicating improved operational efficiency and effectiveness in generating profits.
1. Gross profit margin: The company's gross profit margin has fluctuated slightly over the past five years, ranging from 14.91% in 2019 to 17.40% in 2022. This metric measures the percentage of revenue retained as gross profit after deducting the cost of goods sold. Penske Automotive Group Inc has maintained a reasonable gross profit margin, indicating effective cost management and pricing strategies.
2. Operating profit margin: The operating profit margin has shown a steady increase from 2.82% in 2019 to 5.35% in 2022. This ratio reflects the company's ability to generate profits from its core business operations after accounting for operating expenses. The rising trend suggests improved operational efficiency and cost control measures.
3. Pre-tax margin: The pre-tax margin has also exhibited an upward trajectory, reaching 6.68% in 2022 from 2.55% in 2019. This metric indicates the proportion of earnings generated before taxes relative to total revenue. The increasing pre-tax margin signifies enhanced profitability and financial performance.
4. Net profit margin: The net profit margin, which represents the percentage of revenue retained as net income after deducting all expenses, has improved consistently over the years, rising from 1.88% in 2019 to 4.96% in 2022. This trend highlights the company's ability to effectively manage costs, boost revenue, and generate higher profits for its shareholders.
Overall, Penske Automotive Group Inc's profitability ratios demonstrate a positive trajectory, reflecting the company's successful efforts in optimizing operational efficiency, controlling costs, and enhancing overall profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.62% | 10.54% | 10.07% | 5.32% | 4.68% |
| Return on assets (ROA) | 6.72% | 9.78% | 8.82% | 4.10% | 3.13% |
| Return on total capital | 21.99% | 26.13% | 24.83% | 14.36% | 12.92% |
| Return on equity (ROE) | 22.28% | 33.27% | 29.18% | 16.46% | 15.60% |
Penske Automotive Group Inc's profitability ratios have demonstrated positive trends over the years, indicating improving overall performance. The Operating return on assets (Operating ROA) has shown consistent growth, increasing from 4.68% in 2019 to 8.88% in 2023. This suggests that the company has been effectively utilizing its assets to generate operating income.
Return on assets (ROA) has also exhibited a similar upward trajectory, rising from 3.13% in 2019 to 6.72% in 2023. This metric reflects the company's ability to generate profits relative to its total assets, highlighting improving efficiency and profitability.
Return on total capital has shown substantial growth, escalating from 8.74% in 2019 to 16.65% in 2023. This ratio indicates the overall return the company is generating on both debt and equity capital, showcasing Penske Automotive Group's enhanced performance in utilizing all sources of capital effectively.
Return on equity (ROE) has seen significant improvement, increasing from 15.60% in 2019 to 22.28% in 2023. This metric reveals the company's profitability relative to shareholders' equity and signifies a positive trend in generating returns for its investors.
Overall, the progressive growth in the profitability ratios of Penske Automotive Group Inc reflects the company's ability to enhance efficiency, generate higher returns on its assets, capital, and equity, and create value for its stakeholders.