Sonoco Products Company (SON)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 20.79% | 19.45% | 18.56% | 19.56% | 19.23% |
| Operating profit margin | 10.37% | 9.12% | 8.51% | 6.69% | 8.49% |
| Pretax margin | 9.04% | 7.90% | -2.67% | 4.87% | 7.00% |
| Net profit margin | 6.88% | 6.30% | -1.49% | 3.88% | 5.30% |
Sonoco Products Co.'s profitability ratios have shown some fluctuations over the past five years. The gross profit margin has generally improved from 19.68% in 2019 to 21.17% in 2023, indicating that the company has become more efficient in controlling direct production costs.
The operating profit margin has also shown a slight upward trend, increasing from 9.81% in 2019 to 10.23% in 2023. This suggests that Sonoco has been able to manage its operating expenses effectively while generating revenue.
The pretax margin has varied significantly over the period, with a notable decline in 2021 where it was negative at -2.69%. However, it has shown a recovery trend since then, reaching 9.22% in 2023. This improvement indicates that the company has been able to better manage its taxes and other non-operating expenses.
The net profit margin has followed a similar pattern, with a dip in 2021 where it was negative at -1.53%, followed by a recovery to 7.00% in 2023. This metric reflects the company's ability to generate profit after all expenses, including taxes and interest payments.
Overall, Sonoco Products Co. has shown signs of improving profitability ratios, particularly in its gross profit margin and operating profit margin. However, fluctuations in the pretax margin and net profit margin suggest that the company may still face challenges in effectively managing non-operating expenses.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.95% | 9.58% | 9.60% | 6.78% | 9.11% |
| Return on assets (ROA) | 6.60% | 6.61% | -1.68% | 3.93% | 5.69% |
| Return on total capital | 13.94% | 14.35% | -2.93% | 10.67% | 15.08% |
| Return on equity (ROE) | 19.59% | 22.58% | -4.65% | 10.92% | 16.19% |
Sonoco Products Co.'s profitability ratios indicate the company's ability to generate profits relative to its assets and capital over the past five years. The trend analysis shows fluctuations in the ratios, which may reflect changes in the company's financial performance.
1. Operating return on assets (Operating ROA) has slightly decreased from 10.28% in 2019 to 9.65% in 2023. This ratio measures the company's operating profit generated per dollar of assets, indicating a decline in operational efficiency.
2. Return on assets (ROA) stood at 6.60% in 2023, exhibiting a consistent performance compared to the previous year. The positive value suggests the company's ability to generate profit from its total assets, with a slight improvement in 2023.
3. Return on total capital reflects a decreasing trend from 15.27% in 2019 to 12.79% in 2023. This ratio shows the efficiency of the company in generating returns for both equity and debt holders, which has experienced a decline over the years.
4. Return on equity (ROE) shows a fluctuating pattern from 16.19% in 2019 to 19.59% in 2023. This ratio indicates the company's profitability from the shareholders' perspective, with an improvement in 2023 compared to the previous year.
Overall, the analysis of Sonoco Products Co.'s profitability ratios suggests a mix of performance trends over the past five years, reflecting changes in operational efficiency, asset utilization, and returns for equity and capital providers. Further examination of the company's financial statements and business operations may provide additional insights into the factors driving these profitability fluctuations.