Smurfit WestRock plc (SW)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Gross profit margin | 33.60% | 31.71% | 30.59% | 33.69% |
| Operating profit margin | 11.10% | 11.23% | 10.62% | 10.45% |
| Pretax margin | 9.36% | 10.09% | 9.03% | 8.77% |
| Net profit margin | 7.43% | 7.90% | 7.61% | 7.86% |
Smurfit WestRock plc's profitability ratios have shown some fluctuations over the past four years. The gross profit margin has generally improved, increasing from 30.59% in 2021 to 33.60% in 2023. This indicates that the company is effectively managing its production costs and maximizing its profitability on sales.
The operating profit margin has been relatively stable, hovering around 10-11% over the period. This suggests that the company is efficient in managing its operating expenses and generating profits from its core business activities.
The pretax margin shows a slight decrease from 10.09% in 2022 to 9.36% in 2023. Although there has been some variability, the company is still maintaining a healthy level of profitability before accounting for taxes.
The net profit margin, which reflects the company's bottom-line profitability after all expenses have been deducted, has also varied slightly over the years. It decreased from 7.90% in 2022 to 7.43% in 2023. This indicates that the company may have faced challenges in controlling its costs or may have experienced fluctuations in its revenue and expenses.
Overall, while Smurfit WestRock plc has shown improvements in its gross profit margin, there are some fluctuations in its operating, pretax, and net profit margins. The company may need to focus on cost management strategies and revenue growth initiatives to further enhance its overall profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.91% | 11.53% | 9.17% | 8.66% |
| Return on assets (ROA) | 6.64% | 8.11% | 6.57% | 6.51% |
| Return on total capital | 25.59% | 31.76% | 24.48% | 24.40% |
| Return on equity (ROE) | 15.07% | 20.15% | 17.56% | 17.78% |
Smurfit WestRock plc's profitability ratios demonstrate a mixed trend over the past four years. The Operating ROA has shown fluctuations, with a decrease from 11.53% in 2022 to 9.91% in 2023. This ratio indicates that the company generated 9.91% of operating income for every dollar of assets in 2023, reflecting a slight decline in operational efficiency.
The ROA also displayed a declining trend from 8.11% in 2022 to 6.64% in 2023. This ratio signifies the company's ability to generate profits from its total assets, highlighting a decrease in overall profitability over the period.
On the other hand, the return on total capital experienced significant fluctuations, with a notable decrease from 31.76% in 2022 to 25.59% in 2023. This metric indicates the company's profitability concerning both equity and debt capital employed in its operations.
Furthermore, the ROE has shown a consistent decline over the four-year period, from 20.15% in 2022 to 15.07% in 2023. This ratio reflects the company's ability to generate profits for its shareholders on their equity investments, indicating a decrease in shareholder value creation.
Overall, the profitability ratios of Smurfit WestRock plc depict a mixed performance, with fluctuations and decreasing trends in key metrics, signaling potential challenges in maintaining profitability levels and generating returns for both asset and equity investors.