Interface Inc (TILE)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 35.98% | 34.64% | 36.96% | 38.23% | 40.46% |
| Operating profit margin | 8.53% | 5.97% | 8.95% | -3.66% | 9.94% |
| Pretax margin | 5.19% | 3.32% | 6.20% | -7.39% | 7.73% |
| Net profit margin | 3.63% | 1.55% | 4.72% | -6.70% | 6.01% |
Interface Inc.'s profitability ratios have shown a mixed performance over the past five years. The gross profit margin has been on a declining trend, decreasing from 39.12% in 2019 to 34.96% in 2023. This might indicate increasing costs relative to sales revenue.
The operating profit margin also exhibited a declining trend, from 10.71% in 2019 to 8.09% in 2023. This suggests that the company's operating expenses may be rising at a faster rate than its operating income.
The pretax margin has been fluctuating significantly, with negative performance in 2021 and 2019. However, in 2023, the pretax margin improved to 5.05%. This metric indicates the company's ability to generate profits before accounting for income taxes.
The net profit margin, a key measure of a company's overall profitability, also showed fluctuations. There was a significant improvement in 2023, with a net profit margin of 3.53%, compared to the negative margins in 2021 and 2019. This improvement indicates an enhancement in the company's profitability after facing losses in earlier years.
Overall, Interface Inc. needs to carefully monitor and manage its costs and expenses to improve its profitability ratios, particularly the gross profit and operating profit margins, which have experienced consistent declines over the past five years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.50% | 5.95% | 7.88% | -3.01% | 9.20% |
| Return on assets (ROA) | 3.62% | 1.54% | 4.15% | -5.51% | 5.57% |
| Return on total capital | 11.44% | 8.24% | 11.81% | -5.65% | 13.66% |
| Return on equity (ROE) | 10.45% | 5.41% | 15.20% | -22.03% | 21.51% |
Interface Inc.'s profitability ratios reflect fluctuating performance over the past five years. The operating return on assets (Operating ROA) has shown a declining trend from 10.11% in 2019 to 8.29% in 2023, indicating a decrease in operating efficiency in utilizing assets to generate operating income.
The return on assets (ROA) has been volatile, with a negative ROA of -5.51% in 2021, which signifies that the company incurred losses relative to its assets. However, there has been an improvement in 2023 with a 3.62% ROA, suggesting the company is becoming more profitable in utilizing its assets for generating earnings.
The return on total capital has been relatively stable, ranging from 8.56% in 2021 to 14.92% in 2019. This ratio indicates the company's ability to generate returns from all sources of capital invested in the business, including debt and equity.
The return on equity (ROE) has been fluctuating significantly, with negative figures in 2021 and positive values in other years. This suggests that the company's profitability in relation to shareholders' equity has been inconsistent over the years.
Overall, Interface Inc. should focus on improving its operating efficiency, asset utilization, and profitability to enhance its overall financial performance and provide better returns to its stakeholders.