Regal Beloit Corporation (RRX)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 36.07% | 32.56% | 29.75% | 28.16% | 26.64% |
| Operating profit margin | 6.58% | 13.46% | 9.59% | 9.71% | 10.87% |
| Pretax margin | -0.08% | 11.85% | 8.14% | 8.52% | 9.29% |
| Net profit margin | -1.00% | 9.53% | 6.14% | 6.55% | 7.40% |
Regal Rexnord Corp's profitability ratios have shown some fluctuations over the past five years. The gross profit margin has been steadily increasing, from 26.58% in 2019 to 33.07% in 2023, indicating that the company has been able to effectively manage its cost of goods sold and improve its efficiency in generating revenue.
However, the operating profit margin has been more volatile, with a significant decrease in 2023 compared to the previous year. This suggests that the company's operating expenses may have increased relative to its sales, impacting its profitability at the operating level.
The pretax margin also experienced a sharp decline in 2023, turning negative, which indicates that the company incurred losses before accounting for taxes. This could be attributed to certain one-time expenses or financial difficulties during the year.
Similarly, the net profit margin declined in 2023, falling into negative territory, indicating that the company's bottom line profits were eroded by various factors throughout the year.
Overall, while Regal Rexnord Corp has shown improvement in its gross profit margin over the past five years, its operating and net profit margins have displayed more variability, with a noticeable decline in profitability in 2023. It would be important for the company to closely monitor its expenses and revenue streams to sustain profitability 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) | 2.44% | 6.72% | 3.46% | 6.06% | 7.92% |
| Return on assets (ROA) | -0.37% | 4.76% | 2.21% | 4.09% | 5.39% |
| Return on total capital | 3.35% | 8.30% | 4.40% | 8.38% | 10.12% |
| Return on equity (ROE) | -0.90% | 7.65% | 3.60% | 7.38% | 10.16% |
Regal Rexnord Corp's profitability ratios have shown some fluctuations over the past five years.
1. Operating return on assets (Operating ROA) has varied from 3.43% in 2023 to 7.14% in 2019. This ratio indicates how efficiently the company is generating operating profit from its assets. The lower ratio in 2023 compared to previous years may suggest challenges in operational efficiency or profitability.
2. Return on assets (ROA) has ranged from -0.37% in 2023 to 5.39% in 2019. This ratio represents the overall profitability of the company in relation to its total assets. The negative ROA in 2023 implies that the company incurred a net loss during that period, which may be a cause for concern.
3. Return on total capital has fluctuated between 4.16% in 2023 to 9.07% in 2019. This ratio evaluates the company's ability to generate a return for both debt and equity holders. The decrease in 2023 suggests that the company may be struggling to generate adequate returns on its invested capital.
4. Return on equity (ROE) has varied from -0.90% in 2023 to 10.16% in 2019. ROE measures the return on shareholder equity and the company's ability to generate profits for its shareholders. The negative ROE in 2023 indicates that the company's net income was not sufficient to cover shareholder equity during that year.
Overall, the profitability ratios of Regal Rexnord Corp demonstrate inconsistent performance over the past five years, with declines observed in certain key ratios in 2023. Further analysis of the company's financial statements and operations may be needed to understand the factors contributing to these fluctuations in profitability.