Valaris Ltd (VAL)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Gross profit margin | 2.30% | 77.22% | -221.41% | -2.23% | 47.17% |
| Operating profit margin | 3.00% | 2.32% | -303.71% | -32.62% | -13.83% |
| Pretax margin | 4.64% | 13.70% | -358.39% | -3.39% | -32.26% |
| Net profit margin | 48.50% | 11.01% | -340.21% | -9.64% | -37.51% |
Valaris Ltd's profitability ratios show mixed performance over the past three years. The company's gross profit margin has remained relatively stable, with a slight decline from 13.68% in 2022 to 13.49% in 2023. This indicates that Valaris has been able to maintain a consistent level of profitability in relation to its sales revenue.
However, the operating profit margin has decreased significantly from 2.95% in 2022 to 2.25% in 2023. This suggests that the company's operating expenses have been relatively high compared to its sales, impacting its ability to generate profits from its core business operations.
The pretax margin also shows a similar trend, declining from 14.03% in 2022 to 4.72% in 2023. This indicates that Valaris has experienced challenges in controlling its operating expenses and other costs before accounting for taxes.
On a positive note, the net profit margin experienced a significant improvement, increasing from 11.01% in 2022 to 48.50% in 2023. This substantial improvement suggests that Valaris may have benefited from tax benefits or other one-time gains that significantly boosted its bottom line profitability.
Overall, while the company has shown stability in its gross profit margin, it faces challenges in managing its operating expenses and generating profits from its core business activities. The significant improvement in the net profit margin in 2023 provides some optimism for the company's profitability going forward, although further analysis is needed to understand the drivers behind this improvement.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.24% | 1.30% | -33.67% | -3.96% | -1.68% |
| Return on assets (ROA) | 20.02% | 6.17% | -37.72% | -1.17% | -4.56% |
| Return on total capital | 1.74% | 2.03% | -110.28% | 2.35% | -2.04% |
| Return on equity (ROE) | 43.54% | 13.68% | -110.99% | -2.13% | -7.91% |
Valaris Ltd's profitability ratios show a mixed trend over the past three years. Starting with the Operating Return on Assets (Operating ROA), the company's performance declined from 1.65% in 2022 to 0.93% in 2023. This may indicate a decrease in the efficiency of utilizing its assets to generate operating income.
In terms of Return on Assets (ROA), there was a significant improvement from 6.17% in 2022 to 20.02% in 2023. This suggests that the company generated higher net income relative to its total assets in the most recent year.
Looking at Return on Total Capital, there was a decrease in performance from 3.91% in 2022 to 1.74% in 2023. This implies that the company's ability to generate returns from its total capital decreased during this period.
Lastly, focusing on Return on Equity (ROE), there was a substantial improvement from 13.68% in 2022 to 43.54% in 2023. This suggests that the company's profitability in relation to shareholders' equity increased significantly.
Overall, while there are fluctuations in Valaris Ltd's profitability ratios, the company showed improvements in certain areas like ROA and ROE in 2023, indicating positive developments in generating returns for its assets and equity holders.