Tyson Foods Inc (TSN)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 4.98% | 12.51% | 13.87% | 12.47% | 11.84% |
| Operating profit margin | -0.75% | 8.28% | 9.34% | 6.97% | 6.53% |
| Pretax margin | -1.28% | 7.77% | 8.56% | 6.15% | 5.57% |
| Net profit margin | -1.23% | 6.08% | 6.48% | 4.77% | 4.67% |
Tyson Foods, Inc.'s profitability ratios have fluctuated over the past five years. The gross profit margin, which reflects the company's ability to generate a profit from its cost of goods sold, decreased from 13.87% in 2021 to 4.98% in 2023. This decline indicates a reduction in the company's ability to control the cost of production or an increase in the cost of goods sold relative to revenue.
The operating profit margin, representing the company's ability to generate profits from its core operations, has also shown a significant decline, from 9.34% in 2021 to 0.73% in 2023. This suggests that the company's operating expenses have grown relative to its revenue, impacting its profitability.
Similarly, the pretax margin, which illustrates the proportion of profit from sales before tax, decreased from 8.59% in 2021 to -1.28% in 2023, indicating a significant decline in the company's ability to generate profits before taxes.
The net profit margin, which represents the percentage of revenue that translates into profit after all expenses are considered, also exhibited a downward trend, declining from 6.48% in 2021 to -1.23% in 2023. This suggests that the company's overall profitability has been negatively impacted during this period.
These decreasing profitability ratios raise concerns about Tyson Foods, Inc.'s ability to generate and retain profits from its sales, implying potential challenges in managing costs, expenses, and overall operational efficiency. Further analysis of the company's financial statements and operational performance would be necessary to identify the underlying reasons for these deteriorating profitability ratios and evaluate the company's overall financial health.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -1.09% | 11.98% | 12.11% | 8.73% | 8.41% |
| Return on assets (ROA) | -1.79% | 8.79% | 8.39% | 5.98% | 6.01% |
| Return on total capital | -2.18% | 22.38% | 24.80% | 19.72% | 19.67% |
| Return on equity (ROE) | -3.57% | 16.43% | 17.19% | 13.51% | 14.06% |
Tyson Foods, Inc.'s profitability ratios provide insight into the company's ability to generate profit relative to its assets and capital. Let's analyze each ratio in detail.
1. Operating return on assets (Operating ROA): This ratio measures the company's operating income generated for each dollar of assets. In 2023, the operating ROA decreased significantly to 1.06% from 11.98% in 2022 and 12.11% in 2021. This decline may signal inefficiencies in the use of assets to generate operating income.
2. Return on assets (ROA): ROA gauges the overall profitability of the company by assessing its ability to generate earnings from its assets. In 2023, the ROA fell to -1.79% from 8.79% in 2022 and 8.39% in 2021. The negative ROA in 2023 indicates that the company incurred a net loss for the period, showing a decline in profitability.
3. Return on total capital: This ratio measures the returns generated from the total capital employed in the business. The return on total capital decreased to 1.40% in 2023 from 15.74% in 2022 and 16.24% in 2021, likely due to a decline in earnings relative to the total capital.
4. Return on equity (ROE): ROE evaluates the company's ability to generate profit from shareholders' equity. In 2023, the ROE dropped to -3.57% from 16.43% in 2022 and 17.19% in 2021, indicating lower profitability attributable to shareholders' equity. The negative ROE suggests that the company's net income did not adequately cover the cost of equity.
Overall, the profitability ratios of Tyson Foods, Inc. exhibited a declining trend in 2023. The decrease in these ratios indicates a potential deterioration in the company's financial performance, suggesting caution and the need for a thorough analysis of the company's financial health and operational efficiency.