Simpson Manufacturing Company Inc (SSD)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 47.28% | 44.68% | 48.25% | 45.56% | 43.19% |
| Operating profit margin | 21.52% | 21.79% | 23.51% | 19.95% | 15.91% |
| Pretax margin | 21.59% | 21.27% | 22.92% | 19.73% | 15.65% |
| Net profit margin | 16.03% | 15.85% | 17.03% | 14.78% | 11.76% |
Simpson Manufacturing Co., Inc. has shown improving profitability over the past five years as indicated by its key profitability ratios.
The gross profit margin has been consistently above 40% over the period, reaching a high of 47.99% in 2021. This ratio indicates the company's ability to generate profit from its revenue after accounting for the cost of goods sold.
The operating profit margin has also shown a steady uptrend, reaching 23.36% in 2021. This ratio reflects the company's ability to control its operating expenses relative to its revenue.
The pretax margin, which measures the company's profitability before taxes, has been relatively stable, ranging between 19.68% and 22.79%. This indicates that the company has been effectively managing its tax obligations while generating profits.
The net profit margin, which is the bottom line profitability ratio, has shown significant improvement, increasing from 11.79% in 2019 to 15.99% in 2023. This suggests that the company has been successful in controlling other expenses such as interest and taxes, resulting in higher net profits relative to revenue.
Overall, Simpson Manufacturing Co., Inc. has demonstrated a consistent improvement in profitability over the past five years, with all key profitability ratios trending positively. This indicates strong operational efficiency and effective cost management within the company.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 17.57% | 18.33% | 24.78% | 20.47% | 16.55% |
| Return on assets (ROA) | 13.09% | 13.34% | 17.95% | 15.17% | 12.23% |
| Return on total capital | 23.01% | 24.70% | 30.35% | 25.67% | 20.22% |
| Return on equity (ROE) | 21.07% | 23.63% | 22.50% | 19.06% | 15.02% |
Simpson Manufacturing Co., Inc.'s profitability ratios have shown varying trends over the past five years.
1. Operating return on assets (Operating ROA): This ratio measures the company's operating profit generated per dollar of assets. Simpson Manufacturing Co., Inc. has seen a gradual decline in its Operating ROA from 24.76% in 2021 to 17.73% in 2023, indicating a decrease in operating efficiency.
2. Return on assets (ROA): ROA represents the company's overall profitability by measuring its ability to generate earnings relative to its total assets. The trend for Simpson Manufacturing Co., Inc. shows fluctuation in ROA, ranging from 12.23% in 2019 to 13.34% in 2022. In 2023, the ROA decreased to 13.09%, reflecting a slight decline in profitability.
3. Return on total capital: This ratio evaluates the company's overall profitability relative to both debt and equity capital invested in the business. Simpson Manufacturing Co., Inc. has experienced an upward trend in its Return on total capital, increasing from 19.65% in 2019 to 22.19% in 2023, indicating improved profitability in utilizing all forms of capital.
4. Return on equity (ROE): ROE measures the return generated for the shareholders' equity invested in the company. Simpson Manufacturing Co., Inc. has shown mixed results in ROE, with fluctuations in the range of 15.02% in 2019 to 23.63% in 2022. In 2023, the ROE decreased to 21.07%, suggesting a slightly lower return for equity investors.
Overall, while the company's Operating ROA and ROE ratios have shown some fluctuations, its Return on total capital has been on an increasing trend. Understanding these profitability ratios can provide valuable insights into Simpson Manufacturing Co., Inc.'s financial performance and efficiency in utilizing its assets and capital.