Pool Corporation (POOL)

Return on sales

Based on the provided data, Pool Corporation has shown improvements in its profitability ratios over the years.

1. Gross Profit Margin:
- The gross profit margin has been steadily increasing from 28.73% in December 2020 to 29.66% in December 2024.
- This indicates that the company has been able to effectively control its direct costs of goods sold and improve its efficiency in generating profits from sales.

2. Operating Profit Margin:
- The operating profit margin has also shown a positive trend, increasing from 11.79% in December 2020 to 11.62% in December 2024.
- This suggests that Pool Corporation has been managing its operating expenses efficiently, resulting in a higher proportion of revenue translating into operating profits.

3. Pretax Margin:
- The pretax margin reflects a similar trend of improvement, rising from 11.47% in December 2020 to 10.68% in December 2024.
- Despite some fluctuations, the company has been able to maintain a healthy level of profitability before accounting for taxes.

4. Net Profit Margin:
- The net profit margin, which represents the bottom line profitability after all expenses, has fluctuated over the years.
- Although it increased from 9.32% in December 2020 to 12.29% in December 2021, it declined to 8.18% by December 2024.
- This indicates that Pool Corporation may be facing challenges in managing its non-operating expenses or facing pressure on its bottom line profitability.

In conclusion, Pool Corporation has demonstrated overall improvements in its profitability ratios, showcasing effective cost management and operational efficiency. However, the declining trend in net profit margin towards the end of the period may warrant further analysis to identify the factors impacting the company's bottom line performance.

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Return on investment

Pool Corporation's profitability ratios have shown some fluctuations over the past five years.

1. Operating Return on Assets (Operating ROA):
- The Operating ROA has ranged from 25.78% to 28.77% during this period, indicating the company's ability to generate operating profit from its assets. The higher the percentage, the more efficiently Pool Corporation is utilizing its assets to generate operating income.

2. Return on Assets (ROA):
- The ROA has ranged from 12.89% to 21.08% over the past five years, showing how effectively the company is utilizing its assets to generate profit. A declining trend in ROA may suggest challenges in asset efficiency or profitability.

3. Return on Total Capital:
- The return on total capital has ranged from 48.47% to 83.05% during the period, indicating the company's ability to generate profit from both equity and debt financing. A higher return on total capital signifies efficient utilization of all sources of capital.

4. Return on Equity (ROE):
- The ROE has fluctuated between 34.11% and 60.73% over the five years, showing the return generated on shareholder equity. The downward trend in ROE may indicate challenges in generating profit relative to shareholders' investments.

Overall, Pool Corporation's profitability ratios exhibit variability, with some ratios showing strong performance while others demonstrating potential areas for improvement. It is crucial for the company to assess its asset utilization and profitability strategies to maintain and enhance its financial performance in the future.