ScanSource Inc (SCSC)
Profitability ratios
Return on sales
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Gross profit margin | 13.44% | 12.24% | 11.86% | 12.08% | 11.13% |
| Operating profit margin | 3.04% | 2.90% | 3.59% | 3.46% | 1.95% |
| Pretax margin | 3.10% | 3.06% | 3.22% | 3.36% | 1.83% |
| Net profit margin | 2.35% | 2.36% | 2.37% | 2.52% | 1.44% |
The analysis of ScanSource Inc.'s profitability ratios over the period from June 30, 2021, to June 30, 2025, indicates the following trends:
Gross Profit Margin: The gross profit margin has shown a gradual upward trajectory, increasing from 11.13% in 2021 to 13.44% in 2025. This consistent improvement suggests that the company has been able to enhance its core profitability, possibly through better cost management or pricing strategies that favor higher gross margins.
Operating Profit Margin: The operating profit margin has similarly demonstrated growth, rising from 1.95% in 2021 to a peak of 3.59% in 2023, before experiencing a slight decline to 2.90% in 2024 and a modest recovery to 3.04% in 2025. The initial increase reflects improved operational efficiency or higher sales relative to operating expenses, while the subsequent fluctuation indicates potential challenges or adjustments within operational costs.
Pre-Tax Margin: The pre-tax margin follows a similar pattern, increasing from 1.83% in 2021 to 3.36% in 2022, and then stabilizing around the 3.2% to 3.1% range in 2023 to 2025. The stability in pre-tax margins suggests relatively consistent pre-tax profitability levels, with margins slightly narrowing after the 2022 peak.
Net Profit Margin: The net profit margin demonstrates a positive trend from 1.44% in 2021 to 2.52% in 2022, followed by marginal declines to 2.37% in 2023 and stable levels around 2.36% in 2024 and 2025. The initial increase signifies effective management of overall expenses relative to revenue, but the subsequent stabilization indicates a plateau in net profitability on a percentage basis.
Overall, the profitability ratios indicate a gradually improving gross profit margin combined with fluctuations in operating and net margins. The company's ability to increase gross profit margins coupled with stable or slightly fluctuating operating and net margins points towards operational efficiency, although margin compression at the operating and net levels post-2022 suggests potential challenges in controlling operational costs or competitive pressures.
Return on investment
| Jun 30, 2025 | Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.18% | 5.32% | 6.57% | 6.31% | 3.68% |
| Return on assets (ROA) | 4.01% | 4.33% | 4.34% | 4.58% | 2.72% |
| Return on total capital | 0.00% | 12.21% | 15.65% | 15.52% | 8.82% |
| Return on equity (ROE) | 7.89% | 8.34% | 9.92% | 11.01% | 6.21% |
The analyzed data of ScanSource Inc.'s profitability ratios over the period from June 2021 to June 2025 reveals the following trends:
Operating Return on Assets (Operating ROA):
This ratio demonstrates a general upward trend from 3.68% in June 2021 to a peak of 6.57% in June 2023. Despite a slight decline in subsequent years, it remains elevated at 5.32% in June 2024 and 5.18% in June 2025. The increase up to 2023 indicates improved operational efficiency and asset utilization during this period, though the slight decrease thereafter suggests a potential stabilization or minor decline in core operational performance.
Return on Assets (ROA):
The ROA increased from 2.72% in June 2021 to a high of 4.58% in June 2022, followed by a modest decrease to 4.34% in June 2023 and stabilization around 4.33% in June 2024. It further declines to 4.01% in June 2025. This pattern indicates that while asset utilization efficiency improved notably in 2022, subsequent years saw a slight erosion of this efficiency, possibly due to increasing asset bases or slight declines in net income margins.
Return on Total Capital:
This ratio exhibited a substantial increase from 8.82% in June 2021 to a peak of 15.65% in June 2023, reflecting significant improvements in the company's ability to generate returns from its total capital base, which likely includes both debt and equity. However, the ratio declines sharply to 12.21% in June 2024 and reaches zero in June 2025, which suggests a potential dissolution or significant change in capital structure, or possibly the absence of total capital base data for that period.
Return on Equity (ROE):
ROE shows a steady increase from 6.21% in June 2021 to a peak of 11.01% in June 2022, then decreases slightly to 9.92% in June 2023, followed by declines to 8.34% in June 2024 and 7.89% in June 2025. The upward trend until 2022 indicates improving profitability relative to shareholders' equity, but subsequent reductions point to either increased equity bases, reduced net income, or both, impacting the company's ability to generate equity-based returns.
Overall, ScanSource Inc. experienced notable gains in profitability from 2021 through 2023, with improved operational efficiency and returns on capital and equity. The slight downturns in 2024 and 2025 may reflect market or operational adjustments. The disappearance of the return on total capital ratio in 2025 warrants further investigation into changes in capital structure or accounting practices during that period.