Waters Corporation (WAT)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 9.72% | 27.00% | 31.86% | 32.62% | 29.66% |
| Operating profit margin | 28.27% | 28.77% | 30.20% | 30.03% | 27.95% |
| Pretax margin | 25.83% | 25.90% | 28.97% | 29.47% | 26.45% |
| Net profit margin | 21.82% | 22.60% | 24.47% | 25.32% | 22.59% |
Waters Corporation's profitability ratios have shown some fluctuations over the past five years. The Gross Profit Margin has ranged from 9.72% in December 31, 2024, to 32.62% in December 31, 2021, with an average of 26.57% over the period. The Operating Profit Margin has also varied, ranging from 27.95% in December 31, 2020, to 30.20% in December 31, 2022, with an average of 28.84%. The Pretax Margin has shown a similar trend, fluctuating between 25.83% in December 31, 2024, and 29.47% in December 31, 2021, with an average of 27.12%.
Lastly, the Net Profit Margin has ranged from 21.82% in December 31, 2024, to 25.32% in December 31, 2021, with an average of 23.16%. Overall, the company's profitability margins have been relatively stable, with some fluctuations over the years, indicating the company's ability to generate profits after accounting for various costs and expenses.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 18.15% | 17.67% | 26.62% | 26.55% | 22.73% |
| Return on assets (ROA) | 14.01% | 13.88% | 21.57% | 22.39% | 18.37% |
| Return on total capital | 24.44% | 23.66% | 43.04% | 43.67% | 44.87% |
| Return on equity (ROE) | 34.88% | 55.83% | 140.29% | 188.50% | 224.68% |
Waters Corporation's profitability ratios show a mixed performance over the period from December 31, 2020, to December 31, 2024.
1. Operating Return on Assets (Operating ROA): The Operating ROA has been relatively stable, showing an increasing trend from 22.73% in 2020 to 26.62% in 2022. However, there was a slight decline in 2023 and 2024, with figures of 17.67% and 18.15%, respectively. This suggests that the company's operating income generated from its assets increased initially but decreased in the latter years.
2. Return on Assets (ROA): The overall ROA also demonstrates a similar pattern, improving from 18.37% in 2020 to 22.39% in 2021, but then declining to 14.01% by 2024. This indicates a fluctuating trend in the company's net income generated from its total assets.
3. Return on Total Capital: The Return on Total Capital ratio shows a decrease from 44.87% in 2020 to 24.44% in 2024. This suggests a decline in the profitability derived from both equity and debt capital employed by the company over the years.
4. Return on Equity (ROE): The ROE has experienced a significant decline from 224.68% in 2020 to 34.88% in 2024. This substantial drop signifies a decreasing profitability for shareholders, indicating a less efficient utilization of equity investments by the company.
In conclusion, while Waters Corporation initially demonstrated a strong profitability performance, especially in terms of operating efficiency and capital utilization, there has been a notable decrease in profitability ratios, particularly in the latter years. This may raise concerns about the company's ability to generate returns for its assets, total capital, and equity holders in the long run. Further analysis of the company's financial statements and operational strategies may be needed to understand the factors driving these fluctuations in profitability ratios.