Sterling Construction Company Inc (STRL)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 20.14% | 17.12% | 15.52% | 13.58% | 14.67% |
| Operating profit margin | 12.51% | 10.43% | 9.04% | 7.57% | 7.55% |
| Pretax margin | 16.93% | 9.66% | 7.92% | 6.28% | 5.15% |
| Net profit margin | 12.17% | 7.03% | 6.02% | 4.43% | 3.45% |
The profitability ratios of Sterling Construction Company Inc. demonstrate a consistent upward trend over the analyzed period from December 31, 2020, to December 31, 2024.
The gross profit margin has increased from 14.67% in 2020 to 20.14% in 2024. This indicates an improvement in the company's ability to generate profit from its core operations, suggesting more effective cost management or favorable pricing strategies.
Similarly, the operating profit margin has seen growth from 7.55% in 2020 to 12.51% in 2024. This enhancement reflects not only better gross margins but also improved operational efficiency and control over operating expenses.
The pretax margin has improved significantly from 5.15% in 2020 to 16.93% in 2024. The substantial increase suggests that the company has managed to reduce non-operating expenses or increase non-operating income, thereby maximizing profits before taxes.
Finally, the net profit margin has increased from 3.45% in 2020 to 12.17% in 2024. This progression indicates a strong overall profitability, with the company retaining a larger portion of revenue as profit after all expenses, taxes, and costs have been accounted for.
Overall, the trend across all profitability ratios reflects a positive development in Sterling Construction Company Inc.'s financial performance, highlighting improving margins and enhanced profitability over the analyzed period.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.12% | 11.58% | 11.09% | 8.67% | 9.72% |
| Return on assets (ROA) | 12.77% | 7.80% | 7.38% | 5.07% | 4.44% |
| Return on total capital | 47.46% | 35.54% | 33.58% | 30.61% | 35.05% |
| Return on equity (ROE) | 31.86% | 22.40% | 22.43% | 17.46% | 15.83% |
The profitability ratios of Sterling Construction Company Inc. exhibit a positive growth trajectory over the analyzed period from 2020 to 2024. The Operating Return on Assets (Operating ROA) demonstrates a steady increase, rising from 9.72% in 2020 to 13.12% in 2024, indicating enhanced efficiency in generating operating income relative to total assets. Similarly, the Return on Assets (ROA), which accounts for net income relative to total assets, shows an upward trend—from 4.44% in 2020 to 12.77% in 2024—reflecting improved overall profitability and asset utilization.
The Return on Total Capital maintains high levels throughout the period, with a slight decrease from 35.05% in 2020 to 30.61% in 2021, then recovering and reaching 47.46% by 2024. This ratio suggests that the company has been effective in generating returns from all sources of capital, with notable improvement in the most recent year.
Return on Equity (ROE) displays a consistent upward pattern, increasing from 15.83% in 2020 to 31.86% in 2024. This indicates that the company's shareholders have benefited from increased profitability, with the ability to generate more net income per dollar of equity invested over time.
Overall, the company's profitability ratios reflect a trend of enhanced operational efficiency and improved net income generation, culminating in significant gains in return metrics, especially in recent years. The consistent improvement across these ratios suggests that Sterling Construction Company Inc. has been successful in increasing its profitability and shareholder value during the analyzed period.