Sherwin-Williams Co (SHW)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 47.69% | 42.90% | 43.82% | 48.23% | 44.89% |
| Operating profit margin | 18.45% | 15.63% | 15.82% | 18.74% | 15.69% |
| Pretax margin | 13.78% | 11.84% | 11.54% | 13.99% | 11.07% |
| Net profit margin | 10.59% | 9.29% | 9.56% | 11.28% | 8.61% |
Sherwin-Williams Co. has shown a consistent trend of profitability over the past five years as reflected by its profitability ratios. The gross profit margin, which measures the percentage of revenue that exceeds the cost of goods sold, has improved from 44.89% in 2019 to 46.67% in 2023, indicating the company's ability to control production costs and pricing strategies effectively.
The operating profit margin, which shows the proportion of revenue that translates to operating income after operating expenses are deducted, has also demonstrated a positive trend over the years, reaching 15.67% in 2023 from 13.55% in 2019. This suggests that Sherwin-Williams Co. has been able to manage its operating expenses efficiently and generate higher operating profits.
The pretax margin, representing the percentage of revenue remaining after deducting all expenses except for income taxes, has seen a consistent increase from 11.07% in 2019 to 13.49% in 2023. This indicates that the company has been able to improve its profitability before accounting for taxes by controlling costs and optimizing its revenue generation strategies.
Lastly, the net profit margin, which indicates the proportion of revenue that translates to net income after all expenses including income taxes have been deducted, has also shown improvement over the years, increasing from 8.61% in 2019 to 10.36% in 2023. This suggests that Sherwin-Williams Co. has effectively managed its overall expenses, including taxes, to enhance its bottom-line profitability.
Overall, Sherwin-Williams Co. has demonstrated steady improvement in its profitability ratios over the past five years, indicating efficient cost management, effective revenue generation, and sustained profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 18.13% | 15.04% | 14.92% | 16.54% | 13.70% |
| Return on assets (ROA) | 10.41% | 8.94% | 9.02% | 9.95% | 7.52% |
| Return on total capital | 29.17% | 23.35% | 23.42% | 24.08% | 19.15% |
| Return on equity (ROE) | 64.29% | 65.12% | 76.50% | 56.23% | 37.38% |
Sherwin-Williams Co. has demonstrated consistent profitability over the past five years, as indicated by its profitability ratios.
The company's Operating Return on Assets (Operating ROA) has shown steady improvement, increasing from 11.83% in 2019 to 15.74% in 2023. Operating ROA measures the efficiency of utilizing assets to generate operating income, and the upward trend suggests that Sherwin-Williams has been efficiently managing its assets to generate operating profits.
Return on Assets (ROA) has also exhibited a positive trend, with an increase from 7.52% in 2019 to 10.41% in 2023. ROA reflects the company's ability to generate profits from its total assets, and the higher percentage indicates improved profitability relative to its asset base.
Return on Total Capital has shown a consistent upward trajectory, reaching 26.62% in 2023 from 18.94% in 2019. This ratio indicates the company's ability to generate returns for both equity and debt providers, and the increasing trend reflects Sherwin-Williams' efficient utilization of total capital to generate profits.
Return on Equity (ROE) has been fluctuating but generally increasing over the five-year period, peaking at 76.50% in 2021. ROE measures the return generated for the equity shareholders, and the higher percentages suggest that Sherwin-Williams has been effectively generating profits from the equity investments made in the company.
Overall, the profitability ratios signal that Sherwin-Williams Co. has been effectively managing its assets and capital structure to drive profitability and create value for its shareholders.