PPL Corporation (PPL)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 91.06% | 85.32% | 86.81% | 127.11% | 125.69% |
| Operating profit margin | 19.61% | 17.39% | 24.62% | 28.97% | 27.24% |
| Pretax margin | 11.12% | 12.11% | -16.89% | 32.57% | 34.43% |
| Net profit margin | 8.90% | 9.57% | -25.59% | 26.84% | 31.17% |
PPL Corp's profitability ratios indicate fluctuating performance over the past five years. The gross profit margin has shown a general decreasing trend from 2019 to 2022 before experiencing a slight increase in 2023, reflecting the company's ability to generate profits from sales after deducting the cost of goods sold.
The operating profit margin has also shown a similar trend, declining from 2019 to 2022 but seeing an improvement in 2023. This ratio measures the company's profitability from core operations, indicating efficiency in managing operating expenses relative to revenue.
The pretax margin displays volatility, with significant fluctuations from 2019 to 2023. This ratio reflects the company's earnings before taxes as a percentage of total revenue, suggesting the impact of taxes on profitability.
The net profit margin, representing the proportion of revenue that translates into net income for shareholders, shows a mix of positive and negative trends. The drastic negative net profit margin in 2021 indicates a loss-making year for the company, which improved in 2022 and saw further recovery in 2023. Overall, PPL Corp's profitability performance has been variable, highlighting the importance of closely monitoring the company's financial management and operational efficiency.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.15% | 3.63% | 4.29% | 3.30% | 3.34% |
| Return on assets (ROA) | 1.89% | 2.00% | -4.45% | 3.05% | 3.82% |
| Return on total capital | 5.57% | 5.48% | -0.24% | 8.96% | 7.56% |
| Return on equity (ROE) | 5.31% | 5.43% | -10.78% | 10.98% | 13.44% |
PPL Corp's profitability ratios show some fluctuations over the five-year period. Starting with the Operating ROA, the company's ability to generate operating income from its assets improved from 4.15% in 2023 to 6.22% in 2019, indicating a positive trend.
However, the overall Return on Assets (ROA) shows a more mixed performance with a significant negative ROA of -4.45% in 2021, possibly indicating challenges or one-time events affecting profitability in that year. In contrast, the ROA rebounded to 3.82% in 2019, showcasing the company's ability to recover and generate positive returns from its assets.
The Return on Total Capital, which measures the returns generated from all capital invested in the business, increased from 5.52% in 2023 to 7.88% in 2019. This indicates that PPL Corp was able to generate higher returns relative to the total capital employed over the period.
Lastly, the Return on Equity (ROE) also shows fluctuations, with a notably negative ROE in 2021 followed by a significant improvement to 13.43% in 2019. The ROE illustrates the company's ability to generate profits from shareholder equity, and the improvement from negative territory to double-digit percentages is a positive sign for investors.
Overall, the profitability ratios of PPL Corp demonstrate some variability but also reflect the company's ability to rebound from challenges and improve its profitability performance over the five-year period.