Valero Energy Corporation (VLO)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 8.59% | 9.26% | 2.12% | -1.14% | 4.41% |
| Operating profit margin | 8.22% | 8.92% | 1.88% | -2.43% | 3.54% |
| Pretax margin | 7.94% | 8.50% | 1.05% | -3.58% | 2.88% |
| Net profit margin | 6.13% | 6.56% | 0.82% | -2.19% | 2.24% |
Valero Energy Corp.'s profitability ratios have shown fluctuations over the past five years. The gross profit margin has generally improved, indicating better control over the cost of goods sold and potentially higher pricing power. However, the operating profit margin has been more volatile, with a significant improvement in 2023 compared to 2022, but still below the levels seen in 2020 and 2019.
The pretax margin has also shown variability, with a noticeable improvement in 2023 compared to the previous year. This suggests that the company has been more effective in managing operating expenses and generating operating income before taxes. The net profit margin, while showing an upward trend in recent years, experienced losses in 2020 and minimal profitability in 2021.
Overall, Valero Energy Corp. has demonstrated efforts to enhance its profitability through improving gross profit margins and controlling operating expenses. However, ongoing fluctuations in operating and net profit margins highlight the inherent challenges faced by the company in managing its profitability in a competitive environment.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 18.81% | 25.73% | 3.68% | -3.05% | 7.12% |
| Return on assets (ROA) | 14.01% | 18.90% | 1.61% | -2.74% | 4.50% |
| Return on total capital | 45.72% | 65.86% | 9.70% | -9.37% | 16.41% |
| Return on equity (ROE) | 33.53% | 48.93% | 5.05% | -7.56% | 11.11% |
Valero Energy Corp.'s profitability ratios exhibit fluctuating trends over the past five years. The operating return on assets (Operating ROA) has shown a positive trend, increasing from 7.12% in 2019 to 18.81% in 2023, indicating improved operational efficiency in utilizing its assets to generate operating profits. Similarly, the return on assets (ROA) has also demonstrated an upward trajectory, rising from 4.48% in 2019 to 13.97% in 2023, reflecting an enhancement in overall profitability generated from its total assets.
The return on total capital has displayed a similar pattern, showing significant improvements from -4.72% in 2020 to 31.31% in 2023. This metric highlights the company's ability to generate returns for both equity and debt holders. Furthermore, the return on equity (ROE) has showcased a notable increase, indicating the company's efficiency in generating profits from shareholders' equity. Valero Energy Corp. has managed to enhance its profitability over the years, with ROE reaching 33.43% in 2023 compared to 11.08% in 2019.
Overall, the positive trends in these profitability ratios suggest that Valero Energy Corp. has been successful in enhancing its operational efficiency and effectively utilizing its assets and capital to drive profitability and create value for its stakeholders.