Premier Inc (PINC)
Profitability ratios
Return on sales
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 73.41% | 65.96% | 67.08% | 61.77% | 48.65% |
| Operating profit margin | 0.11% | 9.51% | 18.12% | 18.15% | 14.93% |
| Pretax margin | 9.68% | 11.13% | 18.71% | 22.81% | 14.56% |
| Net profit margin | 2.00% | 8.88% | 13.10% | 18.55% | 16.71% |
The analysis of Premier Inc's profitability ratios over the period from June 2021 to June 2025 reveals several notable trends and shifts.
Gross Profit Margin: The gross profit margin demonstrates a consistent upward trajectory from 48.65% in June 2021 to a peak of 73.41% in June 2025. The steady increase indicates improving efficiency in managing the cost of goods sold relative to revenues, reflecting enhanced inventory management, pricing strategies, or both.
Operating Profit Margin: The operating profit margin exhibits some fluctuations. It increased from 14.93% in June 2021 to a peak of 18.15% in June 2022. However, following this peak, the margin remains relatively stable through June 2023 at approximately 18.12%. A significant decline is observed in June 2024, dropping to 9.51%, and it sharply declines further to 0.11% in June 2025. This substantial decrease suggests mounting operating expenses or other operational challenges impacting profitability.
Pretax Margin: The pretax margin shows an overall declining trend after reaching a high of 22.81% in June 2022. It decreases to 18.71% in June 2023, then declines further to 11.13% in June 2024, and reaches 9.68% in June 2025. Similar to the operating margin, this indicates reduced profitability before income taxes, likely due to increased costs or other operational factors reducing overall profit levels.
Net Profit Margin: The net profit margin follows a downward trend as well, declining from 16.71% in June 2021 to 2.00% in June 2025. The decline is particularly sharp after June 2022, reflecting substantial erosion in net profitability. The significant reduction suggests increased expenses, interest costs, taxes, or other factors negatively impacting net earnings relative to revenue.
Overall, Premier Inc's gross profit margin has shown a positive upward trend, indicating improving cost controls or pricing power at the gross level. Conversely, the operating, pretax, and net profit margins have experienced notable declines, particularly after June 2022, highlighting increasing operational costs or other structural challenges that have significantly affected the company's ability to translate gross profits into net earnings effectively.
Return on investment
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.04% | 3.76% | 7.18% | 7.75% | 7.29% |
| Return on assets (ROA) | 0.65% | 3.51% | 5.19% | 7.92% | 8.16% |
| Return on total capital | 7.53% | 6.52% | 11.33% | 15.03% | 11.78% |
| Return on equity (ROE) | 1.32% | 6.09% | 7.50% | 11.82% | 12.89% |
The analysis of Premier Inc.'s profitability ratios over the period from June 30, 2021, to June 30, 2025, reveals a significant downward trend across multiple key measures.
Starting with the Operating Return on Assets (Operating ROA), the ratio demonstrated a modest increase from 7.29% in 2021 to 7.75% in 2022 but declined in 2023 to 7.18%. This decline accelerated markedly in subsequent years, culminating in a sharply reduced figure of 3.76% in 2024 and further diminishing to near breakeven at 0.04% in 2025. Such a trend indicates deteriorating operational efficiency and profitability at the asset level, especially in the most recent fiscal year.
Similarly, the standard Return on Assets (ROA) followed a comparable pattern. It decreased from 8.16% in 2021 to 7.92% in 2022, then saw a more pronounced decline to 5.19% in 2023. The downward trajectory continued through 2024 to 3.51%, and by 2025, it approached minimal profitability at 0.65%, suggesting a substantial drop in overall asset utilization effectiveness.
The Return on Total Capital exhibited fluctuations but generally followed a downward then slight recovery pattern. It peaked at 15.03% in 2022, declined to 11.33% in 2023, and further contracted to 6.52% in 2024. Notably, in 2025, a slight recovery was observed, with the ratio rising to 7.53%. Despite this partial rebound, the overall trend indicates struggling profitability relative to the total capital employed, with a significant decline from the earlier high.
The Return on Equity (ROE) demonstrated a consistent decline over the analyzed period. Starting at 12.89% in 2021, it decreased to 11.82% in 2022, then halved to 7.50% in 2023. The downward movement persisted with a reduction to 6.09% in 2024 and reached a markedly low level of 1.32% in 2025. This pattern reflects diminished profitability for shareholders, potentially due to declining net income or increased equity levels without proportional profit growth.
Overall, the ratios collectively point toward a contraction in Premier Inc.’s profitability over the examined years, with the most recent fiscal year indicating near-zero returns. This trend suggests challenges in operational efficiency, asset utilization, and equity profitability, raising concerns about the company's ability to generate sustainable earnings in the near term.