TripAdvisor Inc (TRIP)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 20.36% | 19.35% | 4.20% | -25.53% | 35.91% |
| Operating profit margin | 7.22% | 6.96% | -15.27% | -57.92% | 12.03% |
| Pretax margin | 7.17% | 4.61% | -21.56% | -64.96% | 12.48% |
| Net profit margin | 0.57% | 1.38% | -17.25% | -50.88% | 8.11% |
TripAdvisor Inc.'s profitability ratios indicate fluctuating performance over the past five years. The gross profit margin has generally been high, ranging from 90.89% to 93.97%, although there was a slight decrease in 2023 compared to the previous years. This suggests that the company is effectively managing its cost of goods sold.
On the other hand, the operating profit margin, which reflects the efficiency of the company's core operations, shows more volatility. The negative operating profit margins in 2021 and 2020 indicate that TripAdvisor struggled to generate profits from its operations during those years. However, there has been an improvement in 2022 and 2023, with operating profit margins of 6.64% and 8.17%, respectively.
The pretax margin and net profit margin also reflect a similar trend, with significant negative margins in 2021 and 2020 due to operational challenges. The return to profitability in 2022 and 2023 is a positive sign for the company, although the margins remain relatively low, especially the net profit margin which was just 0.56% in 2023.
Overall, TripAdvisor Inc. has shown some improvement in its profitability metrics in recent years, but there is still room for enhancement to ensure sustained profitability and financial health.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.97% | 3.93% | -5.72% | -16.71% | 9.43% |
| Return on assets (ROA) | 0.39% | 0.78% | -6.47% | -14.68% | 6.35% |
| Return on total capital | 9.88% | 6.54% | -8.63% | -24.26% | 17.31% |
| Return on equity (ROE) | 1.15% | 2.32% | -18.76% | -32.62% | 10.85% |
Over the past five years, TripAdvisor Inc.'s profitability ratios have shown fluctuating trends.
1. Operating Return on Assets (Operating ROA): The Operating ROA has been inconsistent, with a significant improvement in 2023 compared to previous years. This ratio indicates that the company generated 5.75% of operating income for every dollar of assets it owns in 2023.
2. Return on Assets (ROA): The ROA has also been volatile, reaching a positive value in 2023 after negative figures in 2021 and 2020. This ratio suggests that the company generated 0.39% of net income for every dollar of assets in 2023.
3. Return on Total Capital: The Return on Total Capital has shown an upward trend since 2020, reflecting an improvement in utilizing both debt and equity to generate profits. In 2023, the company achieved an 8.26% return on its total invested capital.
4. Return on Equity (ROE): The ROE has been negative in 2021 and 2020, indicating that the company's net income failed to cover the shareholders' equity investment during those years. However, there was a slight improvement in 2023, with a ROE of 1.15%.
Overall, while the profitability ratios of TripAdvisor Inc. have shown variability over the past five years, there are some positive signs of improvement in 2023, particularly in the Operating ROA and Return on Total Capital ratios. This suggests that the company may be effectively managing its assets and capital to enhance profitability.