Tractor Supply Company (TSCO)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 35.92% | 35.00% | 35.17% | 35.42% | 34.38% |
| Operating profit margin | 10.16% | 10.10% | 10.26% | 9.39% | 8.90% |
| Pretax margin | 9.84% | 9.89% | 10.05% | 9.12% | 8.66% |
| Net profit margin | 7.61% | 7.66% | 7.83% | 7.05% | 6.73% |
Tractor Supply Company's profitability ratios have shown a consistent improvement over the past five years. The gross profit margin has remained relatively stable, fluctuating between 34.38% and 35.92%. This indicates the company has been effectively managing its cost of goods sold and generating a reasonable gross profit on its sales.
The operating profit margin has also shown a positive trend, increasing from 8.90% in 2019 to 10.16% in 2023. This suggests that the company has been able to control its operating expenses and improve its operational efficiency, resulting in a higher proportion of sales revenue translating into operating profit.
Similarly, the pretax margin and net profit margin have both shown steady improvement over the years, indicating that Tractor Supply Company has been able to effectively manage its pre-tax and after-tax profits. The pretax margin increased from 8.66% in 2019 to 9.84% in 2023, while the net profit margin increased from 6.73% to 7.61% over the same period.
Overall, Tractor Supply Company's profitability ratios reflect a positive trend, demonstrating the company's ability to efficiently generate profits from its operations and effectively manage its expenses.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 16.10% | 16.90% | 16.82% | 14.14% | 14.05% |
| Return on assets (ROA) | 12.05% | 12.82% | 12.84% | 10.62% | 10.63% |
| Return on total capital | 38.13% | 44.75% | 43.72% | 34.28% | 38.44% |
| Return on equity (ROE) | 51.50% | 53.30% | 49.79% | 38.93% | 35.88% |
Tractor Supply Company has shown consistent profitability over the years as evidenced by its profitability ratios.
- Operating return on assets (Operating ROA) remained relatively stable, ranging from 14.05% in 2019 to 16.90% in 2022, before slightly decreasing to 16.10% in 2023. This ratio indicates the company's ability to generate operating income from its assets.
- Return on assets (ROA) also demonstrated a similar trend, with values fluctuating between 10.62% in 2020 and 12.82% in 2022. In 2023, the ROA was 12.05%, showing the company's efficiency in generating profits relative to its total assets.
- Return on total capital saw significant fluctuations, ranging from 34.28% in 2020 to 44.75% in 2022, before decreasing to 38.13% in 2023. This ratio reflects the return generated on all sources of capital employed by the company, including debt and equity.
- Return on equity (ROE) has consistently increased over the years, from 35.88% in 2019 to 53.30% in 2022, before slightly decreasing to 51.50% in 2023. This indicates the company's ability to generate returns for its shareholders based on their equity investment.
Overall, Tractor Supply Company has demonstrated strong profitability performance with steady operating efficiency and increasing returns for both total capital and equity holders. However, the fluctuations in some ratios suggest the need for continuous monitoring and strategic decision-making to maintain and potentially improve profitability levels.