Pool Corporation (POOL)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 29.96% | 31.29% | 30.54% | 28.73% | 28.91% |
| Operating profit margin | 13.47% | 16.60% | 15.73% | 11.79% | 10.67% |
| Pretax margin | 12.42% | 15.94% | 15.57% | 11.48% | 9.93% |
| Net profit margin | 9.44% | 12.11% | 12.29% | 9.32% | 8.18% |
The profitability ratios of Pool Corporation have shown a mixed performance over the last five years.
Starting with the gross profit margin, Pool Corporation has generally maintained a stable level, hovering around 30% over the period. This indicates that the company has been able to effectively manage its production costs and generate a consistent level of gross profit from its operations.
Moving to the operating profit margin, there has been variability in the profitability from operations. The company experienced a significant increase in 2022, reaching 16.61%, before slightly declining to 13.47% in 2023. This suggests that while Pool Corporation has been able to generate higher operating profits in recent years, there may have been challenges in controlling operating expenses in the most recent period.
The pretax margin has also displayed a similar trend to the operating profit margin, showing an uptick in 2022 followed by a slight decrease in 2023. This indicates that while the company has been able to improve its profitability before taxes, there may have been some recent pressures impacting overall profitability.
Finally, the net profit margin reflects the company's bottom-line profitability after accounting for all expenses including taxes. Pool Corporation has experienced fluctuations in net profit margin over the period, with a peak in 2022 at 12.04% before declining to 9.39% in 2023. This suggests that despite generating strong revenues, the company's ability to convert these revenues into bottom-line profits has varied over the years.
In conclusion, while Pool Corporation has demonstrated stable gross profit margins, there have been fluctuations in the operating profit margin, pretax margin, and net profit margin. It will be important for the company to focus on efficiently managing expenses and improving profitability in order to sustain and enhance its overall financial performance in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 21.78% | 28.77% | 25.78% | 26.67% | 23.01% |
| Return on assets (ROA) | 15.26% | 20.99% | 20.14% | 21.08% | 17.64% |
| Return on total capital | 32.07% | 39.50% | 37.13% | 44.46% | 37.51% |
| Return on equity (ROE) | 39.86% | 60.59% | 60.73% | 57.35% | 63.77% |
Pool Corporation's profitability ratios indicate a strong performance over the past five years. The operating return on assets (Operating ROA) has shown a steady trend, with a slight decline in 2023 compared to the prior year, but maintaining a high level above 20%. This suggests that the company is effectively generating profits from its assets, although there may be some efficiency improvements to consider.
The Return on Assets (ROA) has also exhibited a positive trend, consistently above 15%, indicating the company's ability to generate profits relative to its total assets. The Return on Total Capital has shown fluctuations but remains robust, indicating that the company is efficiently utilizing both equity and debt to generate returns.
The Return on Equity (ROE) has demonstrated impressive levels over the years, with a slight decrease in 2023. This suggests that shareholders have been receiving a high return on their equity investment in the company, although the decline in 2023 may warrant further investigation into the factors driving this decrease.
Overall, Pool Corporation's profitability ratios reflect a strong ability to generate returns for both shareholders and capital providers, indicating effective management of assets and capital resources.