Simpson Manufacturing Company Inc (SSD)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 45.99% | 47.28% | 44.68% | 48.25% | 45.56% |
| Operating profit margin | 19.28% | 21.52% | 21.79% | 23.51% | 19.95% |
| Pretax margin | 19.46% | 21.59% | 21.27% | 22.92% | 19.73% |
| Net profit margin | 14.45% | 16.03% | 15.85% | 17.03% | 14.78% |
Simpson Manufacturing Company Inc has shown consistent improvement in its gross profit margin over the years, with a gradual increase from 45.56% in 2020 to 47.28% in 2023 before slightly dropping to 45.99% in 2024. This indicates efficient cost management and pricing strategies.
The operating profit margin has also improved from 19.95% in 2020 to 23.51% in 2021, showing better operational efficiency. However, it slightly declined to 19.28% in 2024, possibly due to increased operating expenses or other factors affecting profitability.
Similarly, the pretax margin has generally been stable around the 20% range, reflecting the company's ability to manage its pre-tax earnings relative to its total revenue over the years.
On the other hand, the net profit margin, which indicates the company's profitability after all expenses, shows a varying trend from 14.78% in 2020 to 17.03% in 2021, then decreasing to 14.45% in 2024. This may suggest challenges in managing costs or generating higher net income relative to sales in the most recent year.
Overall, while Simpson Manufacturing Company Inc has demonstrated strong profitability ratios in the past years, it may need to focus on maintaining or improving its net profit margin in order to sustain its profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 15.71% | 17.57% | 18.33% | 24.78% | 20.47% |
| Return on assets (ROA) | 11.78% | 13.09% | 13.34% | 17.95% | 15.17% |
| Return on total capital | 19.89% | 23.01% | 24.70% | 30.35% | 25.67% |
| Return on equity (ROE) | 17.85% | 21.07% | 23.63% | 22.50% | 19.06% |
Simpson Manufacturing Company Inc's profitability ratios indicate a generally positive trend over the years, with some variations.
1. Operating return on assets (Operating ROA) shows a steady increase from 20.47% in 2020 to 24.78% in 2021, but then declined to 18.33% in 2022. Further decreasing to 17.57% in 2023 and 15.71% in 2024. This indicates that the company's operating income generated from its assets has fluctuated but generally remained at a relatively high level.
2. Return on assets (ROA) also followed a similar pattern, with an increase from 15.17% in 2020 to 17.95% in 2021, before decreasing to 13.34% in 2022, and further to 13.09% in 2023 and 11.78% in 2024. This ratio signifies the company's ability to generate profits from its total assets, and the declining trend suggests a decreasing efficiency in asset utilization.
3. Return on total capital has shown a positive growth trend from 25.67% in 2020 to 30.35% in 2021 but then decreased to 24.70% in 2022, 23.01% in 2023, and 19.89% in 2024. This ratio reflects the company's profitability concerning its total capital employed, and the decreasing trend indicates a lower return compared to the capital invested.
4. Return on equity (ROE) has displayed a mixed performance, with an increase from 19.06% in 2020 to 22.50% in 2021, followed by a slight rise to 23.63% in 2022. However, it declined to 21.07% in 2023 and 17.85% in 2024. ROE measures the profitability from shareholder's equity, and the downward trend may suggest a decrease in the company's ability to generate returns for its equity investors.
Overall, while Simpson Manufacturing Company Inc has shown a strong performance in terms of profitability ratios, the declining trends in some ratios indicate potential challenges in maintaining profitability levels in the future. It is essential for the company to address factors affecting these ratios to sustain and enhance its financial performance.