Polaris Industries Inc (PII)
Gross profit margin
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Gross profit | US$ in thousands | 1,959,900 | 1,959,500 | 1,750,900 | 1,535,700 | 1,648,800 |
| Revenue | US$ in thousands | 8,809,400 | 8,517,300 | 8,117,900 | 6,963,800 | 6,704,930 |
| Gross profit margin | 22.25% | 23.01% | 21.57% | 22.05% | 24.59% |
December 31, 2023 calculation
Gross profit margin = Gross profit ÷ Revenue
= $1,959,900K ÷ $8,809,400K
= 22.25%
The gross profit margin of Polaris Inc has been showing a slight decline over the past five years, decreasing from 24.31% in 2019 to 21.94% in 2023. This downward trend indicates that the company is experiencing challenges in maintaining profitability at the gross profit level. It suggests that the company may be facing issues such as rising production costs, pricing pressures, or inefficiencies in its production processes.
A lower gross profit margin means that the company is retaining a smaller percentage of its revenue after accounting for the cost of goods sold. This could impact the company's overall profitability and ability to generate sufficient funds for operating expenses, debt repayment, and future investments.
It is essential for Polaris Inc to closely analyze the factors affecting its gross profit margin and implement strategies to improve efficiency, control costs, and potentially adjust pricing strategies to sustain and enhance its profitability in the future.