Waters Corporation (WAT)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 27.00% | 31.86% | 32.62% | 29.66% | 32.03% |
| Operating profit margin | 28.77% | 30.20% | 30.03% | 27.95% | 30.16% |
| Pretax margin | 25.90% | 28.97% | 29.47% | 26.45% | 28.87% |
| Net profit margin | 22.60% | 24.47% | 25.32% | 22.59% | 25.21% |
Waters Corp. has displayed relatively stable and healthy profitability ratios over the past five years. The gross profit margin, measuring the proportion of revenue that translates into gross profit, has shown a slight increase from 57.44% in 2020 to 59.57% in 2023, indicating efficient cost management and potentially improved pricing strategies.
The operating profit margin, which reflects the company's efficiency in generating profits from its core operations, has fluctuated but generally remained strong, with a slight decrease from 29.44% in 2019 to 27.66% in 2023. This suggests that the company has effectively controlled operating expenses despite potential challenges.
The pretax margin, which indicates the percentage of each dollar of revenue that translates into pre-tax profit, shows a downward trend from 28.18% in 2019 to 24.90% in 2023. This may be attributed to changes in tax regulations or increased non-operating expenses impacting profitability.
Lastly, the net profit margin, reflecting the company's bottom-line profitability after all expenses have been deducted, has also experienced a gradual decline from 24.61% in 2019 to 21.72% in 2023. This suggests that Waters Corp. may be facing challenges in managing non-operating expenses or sustaining revenue growth relative to costs.
Overall, while Waters Corp. has demonstrated consistent profitability over the years, there are signs of potential challenges in maintaining and optimizing profit margins in the future, which may require a closer examination of cost structures and revenue streams.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 17.67% | 26.62% | 26.55% | 22.73% | 27.71% |
| Return on assets (ROA) | 13.88% | 21.57% | 22.39% | 18.37% | 23.16% |
| Return on total capital | 23.66% | 43.04% | 43.67% | 44.87% | 51.92% |
| Return on equity (ROE) | 55.83% | 140.29% | 188.50% | 224.68% | — |
Waters Corp.'s profitability ratios show a fluctuating trend over the past five years.
Operating return on assets (Operating ROA) has decreased from 27.71% in 2019 to 17.67% in 2023. This indicates that the company's ability to generate profits from its assets has declined over the years, possibly due to changes in operating efficiency or asset utilization.
Return on assets (ROA) has also seen a decrease from 23.16% in 2019 to 13.88% in 2023. This ratio measures the overall profitability of the company relative to its total assets. The declining trend signifies a decrease in overall profitability generated by Waters Corp.
Return on total capital has shown varying results, with a peak of 48.36% in 2019 and a decrease to 23.32% in 2023. This ratio reflects the efficiency of the company in generating returns from its total capital employed, including both debt and equity. The decline may be attributed to changes in the company's capital structure or operational performance.
Return on equity (ROE) has been highly volatile, ranging from 55.83% in 2019 to 224.68% in 2020, but data for 2023 is missing. ROE indicates the profitability relative to shareholders' equity. The fluctuations may be influenced by changes in the company's financial leverage or net income.
Overall, the profitability ratios of Waters Corp. portray a mixed performance, with some declining trends suggesting potential inefficiencies in asset utilization and overall profitability. Further analysis is recommended to identify the underlying factors contributing to these fluctuations and to devise strategies for improving profitability in the future.