Valvoline Inc (VVV)
Pretax margin
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) | US$ in thousands | 1,456,800 | 459,000 | 480,200 | 370,000 | 265,000 |
| Revenue | US$ in thousands | 1,440,900 | 1,232,700 | 2,945,000 | 2,375,000 | 2,390,000 |
| Pretax margin | 101.10% | 37.24% | 16.31% | 15.58% | 11.09% |
September 30, 2023 calculation
Pretax margin = EBT ÷ Revenue
= $1,456,800K ÷ $1,440,900K
= 101.10%
The pretax margin, also known as the pre-tax profit margin, measures a company's profitability before taxes are deducted. It indicates the proportion of revenue that translates into pre-tax profits. A higher pretax margin implies better cost management and efficiency in generating profits.
Analyzing the pretax margin of Valvoline Inc over the past five years reveals fluctuations in the company's profitability. In 2019, the pretax margin stood at 11.09%, reflecting a relatively lower level of profitability. However, in 2020, the pretax margin improved significantly to 19.17%, indicating a sharp increase in profitability and operational efficiency.
Subsequently, in 2021, the pretax margin declined to 18.22%, still remaining above the 2019 level and showcasing sustained profitability. However, the trend reversed in 2022 when the pretax margin dropped to 11.66%, signaling a notable decrease in profitability compared to the previous year.
The most recent data for Sep 30, 2023, indicates a recovery in pretax margin to 16.38%, reflecting an improvement in profitability compared to the previous year. It’s worth noting that although the current pretax margin is lower than the levels seen in 2020 and 2021, it is still higher than the 2019 and 2022 levels.
The fluctuation in Valvoline Inc's pretax margin suggests potential shifts in cost structures, pricing strategies, or operational efficiency over the years. It is essential for investors and stakeholders to closely monitor these changes and assess management's strategies to address any fluctuations in profitability.
Peer comparison
Sep 30, 2023