SM Energy Co (SM)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 70.89% | 77.72% | 74.96% | -34.28% | 57.78% |
| Operating profit margin | 41.57% | 47.03% | 7.97% | -94.88% | -4.40% |
| Pretax margin | 38.51% | 41.56% | 1.76% | -84.91% | -14.53% |
| Net profit margin | 34.45% | 33.11% | 1.38% | -67.86% | -11.76% |
The profitability ratios of SM Energy Co show a fluctuating trend over the past five years. The gross profit margin has remained consistently strong at 100% across all years, indicating effective cost control and management of production costs.
The operating profit margin has varied significantly, with a peak of 47.25% in 2022 but dropping to 41.57% in 2023. This suggests that the company's operating expenses have fluctuated over the years, impacting profitability levels.
The pretax margin also demonstrates volatility, ranging from 41.56% in 2022 to -84.92% in 2020. The significant negative margin in 2020 indicates operational challenges or one-time events affecting the company's profitability.
Similarly, the net profit margin has shown fluctuations, with a high of 34.45% in 2023 and a low of -67.87% in 2020. The negative net profit margins in 2020 and 2019 indicate the company experienced losses in those years.
Overall, while SM Energy Co has maintained a strong gross profit margin, its operating and net profit margins have been more volatile, reflecting fluctuations in operating expenses and profitability levels over the years. The company may need to focus on consistent cost management and operational efficiency to improve its profitability ratios in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 15.47% | 27.63% | 4.00% | -21.48% | -1.11% |
| Return on assets (ROA) | 12.82% | 19.45% | 0.69% | -15.36% | -2.97% |
| Return on total capital | 19.38% | 24.34% | 3.55% | -18.74% | -1.34% |
| Return on equity (ROE) | 22.62% | 36.04% | 1.76% | -37.92% | -6.80% |
SM Energy Co's profitability ratios have shown significant improvement over the past few years.
1. Operating return on assets (Operating ROA) has been on an upward trend, increasing from 4.66% in 2021 to 15.47% in 2023. This indicates that the company has been effective in generating operating income relative to its total assets.
2. Return on assets (ROA) has also seen a positive trend, rising from -15.36% in 2020 to 12.82% in 2023. This signifies that the company's overall profitability in relation to its total assets has improved significantly.
3. Return on total capital has shown consistent improvement, with a notable increase from -1.25% in 2020 to 19.01% in 2023. This indicates that the company has been able to generate a higher return on its total invested capital over the years.
4. Return on equity (ROE) has demonstrated strong growth, increasing from -37.92% in 2020 to 22.62% in 2023. This improvement indicates that the company has been able to generate higher profits for its shareholders relative to their equity investment.
Overall, the profitability ratios of SM Energy Co have exhibited positive trends, reflecting improved operational efficiency and financial performance over the years.