WESCO International Inc (WCC)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 6.28% | 6.71% | 4.45% | 18.88% | 18.92% |
| Operating profit margin | 6.28% | 6.71% | 4.40% | 2.82% | 4.14% |
| Pretax margin | 4.43% | 5.30% | 3.19% | 1.00% | 3.39% |
| Net profit margin | 3.42% | 4.02% | 2.55% | 0.82% | 2.67% |
Wesco International, Inc. has shown an improvement in its profitability over the years as reflected in its profitability ratios. The gross profit margin has remained relatively stable, with a slight fluctuation between 18.88% and 21.76% over the five-year period. This indicates the company's ability to maintain a consistent level of profitability on its sales after accounting for the cost of goods sold.
The operating profit margin has demonstrated a positive trend, increasing from 2.82% in 2020 to 6.28% in 2023. This implies that Wesco International has been able to control its operating expenses more efficiently, resulting in higher profitability from its core operations.
Similarly, the pretax margin and net profit margin have also experienced an upward trajectory over the period. The pretax margin has more than quadrupled from 1.00% in 2020 to 4.43% in 2023, indicating improvements in the company's ability to generate profits before accounting for taxes.
The net profit margin has also witnessed significant growth, reaching 3.16% in 2023 from a mere 0.57% in 2020. This shows that Wesco International has been successful in managing its overall expenses and taxes, allowing for a higher proportion of revenue to translate into net income for the company.
Overall, the consistent improvement in profitability ratios suggests that Wesco International has been able to enhance its operational efficiency and financial performance over the years, which may indicate a positive outlook for the company's future profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.34% | 9.71% | 6.36% | 2.92% | 6.90% |
| Return on assets (ROA) | 5.08% | 5.81% | 3.69% | 0.85% | 4.45% |
| Return on total capital | 13.59% | 14.67% | 9.45% | 4.50% | 9.83% |
| Return on equity (ROE) | 15.20% | 19.32% | 12.30% | 3.01% | 9.86% |
Wesco International, Inc. has shown fluctuating profitability trends over the past five years based on the provided ratios.
1. Operating return on assets (Operating ROA) reflects the company's ability to generate operating income from its assets. The trend shows an increasing trajectory from 6.90% in 2019 to 9.34% in 2023. This indicates that the company has been more efficient in generating operating income relative to its assets in recent years.
2. Return on assets (ROA) measures the overall profitability of the company in generating earnings from its total assets. The trend has been volatile, ranging from 0.59% in 2020 to 5.42% in 2022, with a slight decline to 4.70% in 2023. The variability may indicate fluctuations in the company's asset utilization and overall performance.
3. Return on total capital signifies the company's ability to generate returns for all providers of capital, including shareholders and debt holders. Wesco International, Inc. has shown an improving trend in this ratio from 9.71% in 2019 to 13.58% in 2023, reflecting the company's increased efficiency in generating returns on its total capital employed.
4. Return on equity (ROE) measures the returns generated for shareholders from their equity investment in the company. Wesco International's ROE has varied significantly over the years, with a notable increase from 2.11% in 2020 to 18.03% in 2022, followed by a slight decrease to 14.06% in 2023. This indicates fluctuations in the company's ability to generate returns for its shareholders over the years.
Overall, the profitability ratios of Wesco International, Inc. highlight a mix of improving and fluctuating trends, suggesting varying levels of efficiency and performance in utilizing assets and capital to generate returns for the company and its shareholders.