Valero Energy Corporation (VLO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 3.66% | 8.91% | 9.50% | 2.70% | -1.21% |
| Operating profit margin | 2.89% | 8.19% | 8.90% | 1.87% | -2.43% |
| Pretax margin | 2.85% | 8.13% | 8.68% | 1.35% | -3.10% |
| Net profit margin | 2.13% | 6.10% | 6.54% | 1.13% | -1.71% |
Valero Energy Corporation's profitability ratios have shown fluctuating trends over the past five years.
- The Gross Profit Margin, which indicates the proportion of revenue that exceeds the cost of goods sold, has improved from -1.21% in 2020 to 3.66% in 2024. This indicates that the company has become more efficient in managing its production costs.
- The Operating Profit Margin, a measure of efficiency in managing operating expenses in relation to revenue, has shown improvement as well. It increased from -2.43% in 2020 to 2.89% in 2024, reflecting better control over operating costs.
- The Pretax Margin, a measure of profitability before taxes, has also shown an upward trend, increasing from -3.10% in 2020 to 2.85% in 2024. This suggests that the company has been able to generate higher profits relative to its revenue.
- The Net Profit Margin, which represents the percentage of revenue that translates into net income, has improved from -1.71% in 2020 to 2.13% in 2024. This indicates that Valero has been more effective in managing other expenses such as interest and taxes.
Overall, Valero Energy Corporation has made strides in improving its profitability margins over the past five years, signaling operational efficiency and effective cost management strategies.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.24% | 18.81% | 25.73% | 3.68% | -3.05% |
| Return on assets (ROA) | 4.61% | 14.01% | 18.90% | 2.22% | -2.14% |
| Return on total capital | 17.35% | 45.39% | 67.35% | 11.64% | -7.70% |
| Return on equity (ROE) | 11.30% | 33.53% | 48.93% | 6.99% | -5.89% |
Valero Energy Corporation's profitability ratios reflect a varying performance over the years. The Operating Return on Assets (Operating ROA) improved significantly from -3.05% in 2020 to 25.73% in 2022, indicating enhanced operational efficiency and profitability. However, there was a slight decrease to 18.81% in 2023 and further to 6.24% in 2024.
Similarly, the Return on Assets (ROA) ratio showed an upward trend from -2.14% in 2020 to 18.90% in 2022, before declining to 14.01% in 2023 and 4.61% in 2024. This indicates that Valero's ability to generate profits from its assets improved significantly but then moderated in the following years.
The Return on Total Capital ratio saw a significant increase from -7.70% in 2020 to 67.35% in 2022, indicating improved returns on the total capital employed by the company. However, this ratio declined to 45.39% in 2023 and 17.35% in 2024, suggesting a dip in overall profitability and capital efficiency.
The Return on Equity (ROE) ratio also displayed a positive trajectory, increasing from -5.89% in 2020 to 48.93% in 2022, reflecting a better return to the equity shareholders. Subsequently, there was a decline to 33.53% in 2023 and 11.30% in 2024, signaling a decrease in the profitability attributable to equity holders.
Overall, Valero Energy Corporation's profitability ratios demonstrate a mixed performance, with fluctuations in profitability levels over the years, highlighting the importance of continuous monitoring and strategic decision-making to sustain and enhance overall financial performance.