Pilgrims Pride Corp (PPC)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 6.54% | 10.48% | 9.33% | 6.99% | 9.48% |
| Operating profit margin | 3.05% | 6.80% | 1.44% | 2.05% | 6.11% |
| Pretax margin | 2.13% | 5.93% | 0.63% | 1.35% | 5.46% |
| Net profit margin | 1.88% | 4.31% | 0.21% | 0.79% | 4.04% |
Pilgrim's Pride Corp. has experienced fluctuations in its profitability ratios over the past five years. The gross profit margin has shown a downward trend from 9.38% in 2019 to 6.44% in 2023, indicating a decrease in the company's ability to generate profit after covering the cost of goods sold.
Similarly, the operating profit margin has decreased from 6.05% in 2019 to 3.26% in 2023, reflecting a decline in the company's ability to generate profit from its core operations. This trend may suggest inefficiencies in cost management or declining revenue streams.
The pretax margin has also shown a decreasing trend from 5.41% in 2019 to 2.10% in 2023, indicating a reduction in the company's profitability before accounting for taxes. This suggests that Pilgrim's Pride Corp. may be facing challenges in controlling operating expenses or generating sufficient income to cover other pre-tax costs.
Lastly, the net profit margin has also decreased from 4.00% in 2019 to 1.85% in 2023, indicating a decline in the company's overall profitability after accounting for all expenses, including taxes. This downward trend in profitability ratios highlights the importance for Pilgrim's Pride Corp. to address cost efficiencies and revenue generation strategies to improve its overall financial performance.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.32% | 12.71% | 2.37% | 3.28% | 9.72% |
| Return on assets (ROA) | 3.28% | 8.06% | 0.35% | 1.27% | 6.42% |
| Return on total capital | 17.01% | 41.45% | 9.23% | 11.22% | 29.68% |
| Return on equity (ROE) | 9.65% | 26.26% | 1.20% | 3.70% | 18.05% |
The profitability ratios of Pilgrim`s Pride Corp. have shown varying trends over the past five years.
1. Operating return on assets (Operating ROA) indicates the company's ability to generate profit from its assets before interest and taxes. In 2023, the Operating ROA decreased to 5.78% from 13.04% in 2022, suggesting a decline in operational efficiency from the previous year.
2. Return on assets (ROA) measures the company's overall profitability relative to its total assets. The ROA also decreased in 2023, falling to 3.28% from 8.06% in 2022. This decline indicates a lower return on the company's assets compared to the previous year.
3. Return on total capital reflects the company's ability to generate profit from all its capital sources. In 2023, the Return on total capital decreased to 8.38% from 19.70% in 2022, signaling a lower return on the company's total capital invested.
4. Return on equity (ROE) shows how effectively the company is utilizing shareholders' equity to generate profit. The ROE decreased to 9.65% in 2023 from 26.26% in 2022, indicating a lower return to shareholders' equity compared to the previous year.
Overall, the decreasing trend in all these profitability ratios in 2023 compared to the previous year suggests a potential decline in Pilgrim`s Pride Corp.'s overall profitability and efficiency in generating returns for its stakeholders. Further analysis is needed to understand the specific factors driving these changes and to devise appropriate strategies for improving the company's profitability in the future.