Vulcan Materials Company (VMC)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 26.96% | 25.04% | 21.29% | 24.74% | 26.39% |
| Operating profit margin | 18.40% | 18.34% | 13.01% | 18.21% | 18.44% |
| Pretax margin | 15.80% | 16.00% | 10.77% | 15.74% | 15.31% |
| Net profit margin | 12.29% | 11.99% | 7.87% | 12.08% | 12.03% |
Based on the provided data, we can analyze the profitability ratios of Vulcan Materials Company over the five-year period from 2020 to 2024.
1. Gross Profit Margin:
- The gross profit margin measures the company's ability to generate profit from its core operations after deducting the cost of goods sold.
- Vulcan Materials Company's gross profit margin decreased from 26.39% in 2020 to 21.29% in 2022, but then improved to 26.96% by the end of 2024.
- The fluctuation in the gross profit margin indicates changes in the company's pricing strategy, production costs, or efficiency in managing inventory.
2. Operating Profit Margin:
- The operating profit margin reflects the company's profitability from its normal business operations, considering operating expenses.
- Vulcan Materials Company's operating profit margin remained relatively stable, with a slight decrease from 18.44% in 2020 to 13.01% in 2022, and then recovering to 18.40% by the end of 2024.
- The company managed to maintain profitability despite facing fluctuations in operating costs and revenues.
3. Pretax Margin:
- The pretax margin indicates the company's profitability before accounting for taxes, providing insight into its operating efficiency and financial health.
- Vulcan Materials Company's pretax margin varied over the years, with a decrease from 15.31% in 2020 to 10.77% in 2022, followed by an increase to 15.80% by the end of 2024.
- The fluctuation in the pretax margin suggests changes in the company's revenue, expenses, and tax obligations.
4. Net Profit Margin:
- The net profit margin reflects the company's bottom line profitability after deducting all expenses, including taxes.
- Vulcan Materials Company's net profit margin showed a similar pattern to the pretax margin, decreasing from 12.03% in 2020 to 7.87% in 2022, and then improving to 12.29% by the end of 2024.
- The company's ability to maintain or improve its net profit margin indicates its effectiveness in managing costs, taxes, and overall profitability.
Overall, while Vulcan Materials Company experienced fluctuations in its profitability ratios over the five-year period, it managed to maintain a competitive position in the industry by effectively managing its operations and financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.98% | 9.81% | 6.68% | 7.39% | 7.66% |
| Return on assets (ROA) | 5.33% | 6.42% | 4.04% | 4.90% | 5.00% |
| Return on total capital | 16.79% | 19.23% | 12.74% | 15.60% | 14.56% |
| Return on equity (ROE) | 11.23% | 12.47% | 8.31% | 10.25% | 9.70% |
Vulcan Materials Company's profitability ratios indicate fluctuating performance over the period from December 31, 2020, to December 31, 2024.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA decreased from 7.66% in 2020 to 6.68% in 2022 before experiencing a significant improvement to 9.81% in 2023. It slightly decreased to 7.98% in 2024.
2. Return on Assets (ROA):
- The ROA also followed a similar trend, starting at 5.00% in 2020, declining to 4.04% in 2022, then increasing to 6.42% in 2023, and finally settling at 5.33% in 2024.
3. Return on Total Capital:
- The Return on Total Capital exhibited a consistent increase from 14.56% in 2020 to 19.23% in 2023, then slightly decreased to 16.79% in 2024.
4. Return on Equity (ROE):
- The ROE oscillated between 8.31% and 12.47%, starting at 9.70% in 2020, peaking in 2023, and ending at 11.23% in 2024.
Overall, Vulcan Materials Company's profitability ratios show a mixed performance with fluctuations in the levels of profitability over the analyzed period. It is essential for stakeholders to closely monitor these ratios to assess the company's financial health and efficiency in generating returns for its investors and capital providers.