Penske Automotive Group Inc (PAG)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 16.46% | 16.71% | 17.40% | 17.38% | 15.58% |
| Operating profit margin | 4.32% | 4.58% | 5.35% | 5.31% | 3.45% |
| Pretax margin | 4.07% | 4.81% | 6.68% | 6.29% | 3.46% |
| Net profit margin | 3.02% | 3.57% | 4.96% | 4.65% | 2.66% |
Penske Automotive Group Inc's profitability ratios have shown mixed trends over the past five years. The gross profit margin has remained relatively stable, with slight fluctuations between 15.58% in 2020 and 17.40% in 2022, before declining to 16.46% in 2024. This indicates the company's ability to maintain profitability on sales after deducting the cost of goods sold.
The operating profit margin has shown a notable improvement over the period, increasing from 3.45% in 2020 to 5.35% in 2022, before decreasing slightly to 4.32% in 2024. This suggests that Penske Automotive Group Inc has been able to effectively manage its operating expenses and generate greater profits from its core business activities.
Similarly, the pretax margin and net profit margin have followed a similar pattern, with significant increases from 2020 to 2022, followed by decreases in 2023 and 2024. The pretax margin improved from 3.46% in 2020 to 6.68% in 2022, before declining to 4.07% in 2024. The net profit margin also saw growth from 2.66% in 2020 to 4.96% in 2022, before falling to 3.02% in 2024.
Overall, while Penske Automotive Group Inc has demonstrated the ability to increase its profitability margins, the slight declines in recent years may signal potential challenges in managing costs or sustaining revenue growth. Further analysis of the company's financial performance and strategic initiatives would be necessary to understand the underlying factors contributing to these trends.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.88% | 8.62% | 10.54% | 10.07% | 5.32% |
| Return on assets (ROA) | 5.50% | 6.72% | 9.78% | 8.82% | 4.10% |
| Return on total capital | 29.13% | 34.81% | 35.64% | 33.12% | 21.18% |
| Return on equity (ROE) | 17.64% | 22.28% | 33.06% | 29.01% | 16.34% |
Penske Automotive Group Inc's profitability ratios show a general positive trend over the years, indicating an improvement in the company's efficiency in generating profits from its assets and capital.
1. Operating Return on Assets (Operating ROA) reflects the company's operating performance relative to its assets. Penske Automotive's Operating ROA has increased from 5.32% in 2020 to 10.54% in 2022 before slightly dropping to 7.88% in 2024. This suggests that the company has been able to generate more operating income for every dollar of assets employed, showing effective asset utilization.
2. Return on Assets (ROA) measures the overall profitability of the company in relation to its total assets. Penske Automotive's ROA has shown a similar positive trend, increasing from 4.10% in 2020 to 9.78% in 2022, before decreasing slightly to 5.50% in 2024. This indicates that the company has been successful in generating profits from its assets.
3. Return on Total Capital evaluates how effectively the company generates profits from both debt and equity capital. Penske Automotive's Return on Total Capital has shown a steady increase from 21.18% in 2020 to 35.64% in 2022, before decreasing to 29.13% in 2024. This indicates that the company has been efficient in utilizing its capital to generate returns for its stakeholders.
4. Return on Equity (ROE) measures the company's profitability in relation to its shareholders' equity. Penske Automotive's ROE has also demonstrated a positive trajectory, rising from 16.34% in 2020 to 33.06% in 2022, before dropping to 17.64% in 2024. This indicates that the company has been effectively managing shareholder investments to generate returns.
Overall, Penske Automotive Group Inc's profitability ratios show a pattern of improvement in the company's ability to generate profits from its assets, capital, and equity over the years, reflecting efficient operational performance and effective resource utilization.