Select Medical Holdings (SEM)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 5.37% | 9.01% | 12.12% | 12.08% | 10.07% |
| Operating profit margin | 8.59% | 6.16% | 11.13% | 9.87% | 8.52% |
| Pretax margin | 5.05% | 3.38% | 8.30% | 6.45% | 3.83% |
| Net profit margin | 3.77% | 2.43% | 6.27% | 4.51% | 2.68% |
Select Medical Holdings Corporation has shown varying levels of profitability over the past five years as measured by key profitability ratios. The gross profit margin, which indicates the percentage of revenue that remains after subtracting the cost of goods sold, fluctuated between 11.58% and 14.91%. This ratio improved in 2023 compared to 2022, suggesting better control over direct costs.
The operating profit margin, which measures the efficiency of the company in managing its operating expenses in relation to revenue, has also varied, ranging from 5.91% to 9.18%. Notably, there was a significant improvement in 2023, reflecting enhanced operational efficiency compared to the preceding year.
The pretax margin, indicative of the proportion of income before taxes to revenue, experienced fluctuations between 4.11% and 10.15%. The notable decrease in 2023 compared to 2021 suggests lower income before taxes relative to total revenue.
Lastly, the net profit margin, which represents the percentage of revenue that translates into net income, ranged from 2.42% to 6.27%. There was an upward trend from 2019 to 2021, followed by a decline in 2022 and a slight improvement in 2023. This implies that the company's ability to convert revenue into net income has been fluctuating over the years.
In summary, Select Medical Holdings Corporation has demonstrated varying levels of profitability over the years, with improvements in gross and operating profit margins in 2023, but a decline in pretax margins compared to the previous year. The net profit margin also fluctuated, showing an overall positive trend from 2019 to 2021, followed by some instability in the subsequent years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.22% | 5.26% | 9.70% | 7.42% | 6.43% |
| Return on assets (ROA) | 3.17% | 2.07% | 5.46% | 3.38% | 2.02% |
| Return on total capital | 40.73% | 34.82% | 60.18% | 49.40% | 53.53% |
| Return on equity (ROE) | 18.90% | 14.17% | 36.24% | 24.42% | 19.25% |
Select Medical Holdings Corporation has shown consistent profitability over the past five years, with varying levels of return on assets (ROA), operating return on assets (Operating ROA), return on total capital, and return on equity (ROE).
1. Operating return on assets (Operating ROA) has increased steadily from 6.43% in 2019 to 7.19% in 2023, indicating that the company is generating more operating income per dollar of assets.
2. Return on assets (ROA) has fluctuated over the years, reaching a peak of 5.28% in 2021 and a low of 2.00% in 2022. The 3.05% ROA for 2023 is slightly lower compared to 2021 but higher than the previous two years.
3. Return on total capital has shown a similar trend, peaking at 12.99% in 2021 and reaching 11.93% in 2023. This ratio reflects the company's ability to generate profits from both debt and equity capital invested.
4. Return on equity (ROE) has shown significant volatility, with a high of 35.03% in 2021 and a low of 13.67% in 2022. The 18.22% ROE for 2023 indicates that the company is generating a healthy return for its shareholders, albeit slightly lower than the peak in 2021.
Overall, Select Medical Holdings Corporation has demonstrated solid profitability, with consistent growth in Operating ROA and relatively strong returns on total capital and equity. However, the fluctuations in ROA and ROE suggest the need for continued monitoring and strategic adjustments to maintain and enhance profitability in the future.