Sherwin-Williams Co (SHW)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 48.47% | 46.67% | 42.10% | 42.83% | 47.29% |
| Operating profit margin | 16.33% | 16.02% | 13.45% | 12.95% | 15.57% |
| Pretax margin | 14.94% | 13.49% | 11.62% | 11.27% | 13.72% |
| Net profit margin | 11.61% | 10.36% | 9.12% | 9.35% | 11.06% |
Sherwin-Williams Co's gross profit margin has seen a slight decline from 47.29% in 2020 to 42.83% in 2021, further decreasing to 42.10% in 2022. However, there was a notable improvement in 2023 with a gross profit margin of 46.67%, which further improved to 48.47% in 2024, indicating an upward trend.
The operating profit margin also showed a similar pattern, starting at 15.57% in 2020, dropping to 12.95% in 2021, then increasing to 13.45% in 2022, and significantly rising to 16.02% in 2023, finally reaching 16.33% in 2024.
Sherwin-Williams Co's pretax margin followed a comparable trajectory, starting at 13.72% in 2020, decreasing to 11.27% in 2021, then slightly increasing to 11.62% in 2022, and experiencing a more substantial rise to 13.49% in 2023, continuing to improve to 14.94% in 2024.
The net profit margin also mimicked this trend, beginning at 11.06% in 2020, dropping to 9.35% in 2021, then slightly declining to 9.12% in 2022, before seeing a notable increase to 10.36% in 2023, and further improving to 11.61% in 2024.
Overall, the profitability ratios of Sherwin-Williams Co have shown fluctuations, with some periods of decline followed by significant improvements, culminating in stronger profit margins in recent years, indicating positive momentum in the company's profitability.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 15.97% | 16.09% | 13.19% | 12.50% | 14.01% |
| Return on assets (ROA) | 11.35% | 10.41% | 8.94% | 9.02% | 9.95% |
| Return on total capital | 92.86% | 99.38% | 95.94% | 106.42% | 79.48% |
| Return on equity (ROE) | 66.19% | 64.29% | 65.12% | 76.50% | 56.23% |
Sherwin-Williams Co's profitability ratios show a mixed performance over the past five years.
1. Operating return on assets (Operating ROA) has fluctuated slightly from 14.01% in 2020 to 12.50% in 2021, then increased to 13.19% in 2022, significantly jumped to 16.09% in 2023, and slightly dropped to 15.97% in 2024. This indicates that the company has been able to generate operating income efficiently from its assets, with a notable improvement in 2023.
2. Return on assets (ROA) has followed a similar trend, starting at 9.95% in 2020, decreasing to 9.02% in 2021, then slightly declining to 8.94% in 2022 before increasing to 10.41% in 2023 and further to 11.35% in 2024. This suggests that the company's overall profitability relative to its total assets has improved progressively in recent years.
3. Return on total capital has shown significant variability, with a sharp increase from 79.48% in 2020 to 106.42% in 2021, followed by a decrease to 95.94% in 2022, a further decrease to 99.38% in 2023, and eventually dropping to 92.86% in 2024. This ratio reflects the company's ability to generate returns from both debt and equity sources, with fluctuations indicating changing capital structure or efficiency in utilizing capital.
4. Return on equity (ROE) has generally been favorable over the years, starting at 56.23% in 2020 and consistently increasing to 76.50% in 2021, then dropping to 65.12% in 2022, slightly decreasing to 64.29% in 2023, and finally increasing again to 66.19% in 2024. This indicates the company's effectiveness in generating profits from shareholders' equity, with a strong performance in 2021.
In summary, Sherwin-Williams Co has shown overall improvement in profitability ratios over the analyzed period, with some fluctuations year-on-year. The company's ability to generate returns from its operations, assets, capital, and equity has generally been positive, reflecting efficient management of resources and successful utilization of capital to drive profitability.