Reliance Steel & Aluminum Co (RS)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 100.00% | 29.06% | 30.84% | 31.86% | 31.49% |
| Operating profit margin | 8.38% | 11.75% | 14.72% | 13.83% | 6.42% |
| Pretax margin | 8.24% | 11.76% | 14.28% | 13.36% | 5.43% |
| Net profit margin | 6.33% | 9.02% | 10.81% | 10.03% | 4.19% |
Based on the provided data, the profitability ratios of Reliance Steel & Aluminum Co have shown fluctuations over the years.
The gross profit margin, which indicates the efficiency of the company in generating profit from its core business activities, has ranged from 29.06% in 2023 to a significant spike to 100.00% in 2024, possibly due to specific events like extraordinary gains or accounting adjustments.
The operating profit margin, reflecting the company's ability to control operating expenses, has demonstrated an upward trend from 6.42% in 2020 to 14.72% in 2022, before decreasing slightly to 8.38% in 2024.
The pretax margin, showing the percentage of each dollar of revenue that translates into pre-tax profit, followed a similar pattern as the operating profit margin, increasing from 5.43% in 2020 to 14.28% in 2022, then declining to 8.24% in 2024.
Lastly, the net profit margin, which reveals the portion of revenue remaining after accounting for all expenses, has varied between 6.33% in 2024 to 10.81% in 2022.
Overall, it is critical for stakeholders to closely monitor these profitability ratios to assess the company's financial health and operational effectiveness over time.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 11.57% | 16.60% | 24.27% | 20.44% | 6.98% |
| Return on assets (ROA) | 8.73% | 12.75% | 17.81% | 14.82% | 4.55% |
| Return on total capital | 16.31% | 23.06% | 35.49% | 32.32% | 13.71% |
| Return on equity (ROE) | 12.12% | 17.30% | 25.96% | 23.22% | 7.22% |
Reliance Steel & Aluminum Co has displayed an improving trend in its profitability ratios over the years.
1. Operating Return on Assets (Operating ROA): This ratio measures the company's operating income generated per dollar of assets. Reliance Steel & Aluminum Co's Operating ROA has increased steadily from 6.98% in 2020 to 24.27% in 2022, indicating the company's ability to efficiently utilize its assets to generate operating profits. However, there was a slight dip in 2023 to 16.60%, followed by a further decrease to 11.57% in 2024.
2. Return on Assets (ROA): This ratio reflects the company's overall profitability by measuring the net income generated per dollar of assets. Reliance Steel & Aluminum Co's ROA has shown a similar positive trend, starting at 4.55% in 2020 and peaking at 17.81% in 2022. The ratio declined to 12.75% in 2023 and further dropped to 8.73% in 2024.
3. Return on Total Capital: This ratio indicates the return generated on all capital invested in the company, including debt and equity. Reliance Steel & Aluminum Co's Return on Total Capital has also been on an upward trajectory, rising from 13.71% in 2020 to 35.49% in 2022. However, there was a decrease to 16.31% in 2024.
4. Return on Equity (ROE): This ratio evaluates the return generated on shareholders' equity. Reliance Steel & Aluminum Co's ROE has shown a similar pattern of improvement, starting at 7.22% in 2020 and reaching 25.96% in 2022. The ratio declined in the subsequent years to 12.12% in 2024.
Overall, Reliance Steel & Aluminum Co's profitability ratios indicate a strong performance in utilizing assets and generating profits, with some fluctuations in the recent years that may require further analysis to identify potential factors impacting profitability.