Super Micro Computer Inc (SMCI)
Profitability ratios
Return on sales
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 18.01% | 15.40% | 15.03% | 15.76% | 14.16% |
| Operating profit margin | 10.68% | 6.45% | 3.48% | 2.57% | 2.78% |
| Pretax margin | 10.54% | 6.51% | 3.34% | 2.61% | 2.48% |
| Net profit margin | 8.98% | 5.49% | 3.14% | 2.52% | 2.05% |
Sure, let's analyze the profitability ratios of Super Micro Computer Inc based on the provided data:
1. Gross Profit Margin:
The gross profit margin measures the percentage of revenue that exceeds the cost of goods sold. Super Micro Computer Inc's gross profit margin has shown a steady improvement over the past five years, increasing from 14.16% in 2019 to 18.01% in 2023. This indicates that the company has been able to control its production costs and/or increase the prices of its products, resulting in a higher margin on its sales.
2. Operating Profit Margin:
The operating profit margin represents the percentage of revenue that remains after deducting operating expenses. Super Micro Computer Inc's operating profit margin has also demonstrated consistent growth, rising from 2.78% in 2019 to 10.68% in 2023. This signifies an improvement in the efficiency of the company's operations and cost management, leading to higher profitability at the operating level.
3. Pretax Margin:
The pretax margin indicates the percentage of revenue that translates to pre-tax profit. Super Micro Computer Inc's pretax margin has exhibited significant improvement over the past five years, climbing from 2.48% in 2019 to 10.54% in 2023. This suggests that the company has been able to effectively manage its non-operating expenses and generate higher profits before taxes.
4. Net Profit Margin:
The net profit margin measures the percentage of revenue that ultimately translates to net profit after all expenses, including taxes. Super Micro Computer Inc's net profit margin has shown a consistent upward trend, increasing from 2.05% in 2019 to 8.98% in 2023. This indicates the company's ability to effectively manage its tax liabilities and other non-operating costs, resulting in improved overall profitability.
In summary, the profitability ratios of Super Micro Computer Inc have exhibited a positive trajectory over the past five years, reflecting improvements in both operational efficiency and overall profitability. This suggests that the company has been successful in controlling costs, expanding its gross and operating margins, and generating higher profits at the pre-tax and net levels.
Return on investment
| Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | Jun 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 20.71% | 10.46% | 5.53% | 4.46% | 5.78% |
| Return on assets (ROA) | 17.42% | 8.90% | 4.99% | 4.39% | 4.27% |
| Return on total capital | 36.38% | 21.90% | 10.72% | 8.35% | 9.94% |
| Return on equity (ROE) | 32.45% | 20.00% | 10.20% | 7.91% | 7.64% |
Super Micro Computer Inc's profitability ratios indicate the company's ability to generate profits in relation to its assets and capital.
Firstly, the operating return on assets (Operating ROA) has shown a consistent improvement over the past five years, reaching 20.71% in Jun 30, 2023, up from 5.78% in Jun 30, 2019. This indicates that the company has been able to increase its operating income in relation to its assets, reflecting improved operational efficiency and effective asset utilization.
Similarly, the return on assets (ROA) has also demonstrated steady growth, standing at 17.42% in Jun 30, 2023, compared to 4.27% in Jun 30, 2019. This suggests that the company's overall profitability in relation to its assets has improved significantly.
The return on total capital has also exhibited a similar positive trend, with a notable increase from 9.80% in Jun 30, 2019 to 33.48% in Jun 30, 2023. This indicates that the company has been able to generate higher returns in relation to its total capital, reflecting efficient capital deployment and improved overall profitability.
Furthermore, the return on equity (ROE) has displayed consistent growth, reaching 32.45% in Jun 30, 2023, up from 7.64% in Jun 30, 2019. This signifies that the company has been successful in generating higher returns for its shareholders, reflecting improved financial performance and effective utilization of shareholder equity.
Overall, the profitability ratios reflect Super Micro Computer Inc's ability to enhance its operational efficiency, optimize asset utilization, and generate higher returns for both its capital providers and shareholders, indicating a positive trend in the company's profitability over the past five years.