Packaging Corp of America (PKG)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 21.27% | 21.77% | 24.66% | 24.23% | 20.57% |
| Operating profit margin | 13.14% | 13.78% | 11.54% | 10.91% | 5.58% |
| Pretax margin | 12.70% | 13.00% | 16.10% | 14.34% | 9.50% |
| Net profit margin | 9.60% | 9.81% | 12.15% | 10.88% | 6.92% |
The Gross Profit Margin of Packaging Corp of America has shown a steady improvement from 20.57% in 2020 to 24.66% in 2022 before slightly decreasing to 21.27% in 2024. This indicates the company's ability to efficiently generate profit from its revenue after accounting for the cost of goods sold.
The Operating Profit Margin has exhibited a similar positive trend, increasing from 5.58% in 2020 to 13.14% in 2024. This demonstrates the company's effective management of its operational expenses relative to its revenue.
The Pretax Margin has shown fluctuations over the years, reaching a peak of 16.10% in 2022 but declining to 12.70% in 2024. This may indicate varying levels of non-operating income or expenses impacting the company's profitability before taxes.
The Net Profit Margin of Packaging Corp of America has portrayed a generally increasing trend from 6.92% in 2020 to 9.60% in 2024, with a slight dip in 2023. This ratio reflects the company's ability to convert its revenue into net income, considering all expenses and taxes.
Overall, the company has demonstrated an overall positive trajectory in terms of profitability margins, although fluctuations in certain years suggest the need for continued monitoring and evaluation of cost management and revenue generation strategies.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 12.47% | 12.38% | 12.22% | 10.76% | 5.00% |
| Return on assets (ROA) | 9.11% | 8.81% | 12.87% | 10.73% | 6.20% |
| Return on total capital | 25.11% | 26.70% | 39.14% | 34.96% | 22.37% |
| Return on equity (ROE) | 18.28% | 19.14% | 28.08% | 23.32% | 14.20% |
Packaging Corp of America has demonstrated a positive trend in profitability ratios over the past five years.
1. Operating return on assets (Operating ROA) has shown consistent improvement, increasing from 5.00% in 2020 to 12.47% in 2024. This indicates the company's ability to generate operating profits from its assets has been steadily increasing.
2. Return on assets (ROA) has also shown a positive trajectory, reaching a peak of 12.87% in 2022. Although there was a slight dip in 2023 and 2024, the overall trend is favorable, indicating the effectiveness of the company in generating profits relative to its total assets.
3. Return on total capital has increased significantly over the years, reflecting the company's efficient utilization of both debt and equity capital. The ratio rose from 22.37% in 2020 to 39.14% in 2022 before moderating slightly in the subsequent years.
4. Return on equity (ROE) has shown a similar pattern of growth, reaching a high of 28.08% in 2022. This ratio indicates how well the company is generating returns for its shareholders and depicts a positive trend in shareholder wealth creation.
Overall, Packaging Corp of America's profitability ratios demonstrate a strong performance, with improvements in operational efficiency, asset utilization, capital management, and shareholder value creation over the analyzed period.