Western Digital Corporation (WDC)
Profitability ratios
Return on sales
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 22.50% | 15.71% | 31.73% | 27.13% | 23.15% |
| Operating profit margin | -2.42% | -10.70% | 12.91% | 7.32% | 2.05% |
| Pretax margin | -5.05% | -12.99% | 11.47% | 5.56% | -0.28% |
| Net profit margin | -6.10% | -14.02% | 8.10% | 4.93% | -1.53% |
The profitability ratios of Western Digital Corporation have shown a mix of performance over the past five years. The gross profit margin has been relatively stable, ranging from 15.71% to 31.73%, with a significant increase in 2022 followed by a slight decrease in 2024.
However, the operating profit margin has been negative in three out of the five years, indicating operational inefficiencies and high operating expenses. The company needs to focus on cost-control measures to improve operating efficiency.
Similarly, the pretax and net profit margins have also been negative in most years, highlighting the challenges Western Digital faces in generating profits after accounting for taxes and other expenses. It is essential for the company to enhance revenue generation while managing costs effectively to improve overall profitability in the future.
Return on investment
| Jun 30, 2024 | Jun 30, 2023 | Jun 30, 2022 | Jun 30, 2021 | Jun 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -1.31% | -5.24% | 9.11% | 4.67% | 1.31% |
| Return on assets (ROA) | -3.30% | -6.86% | 5.71% | 3.14% | -0.97% |
| Return on total capital | -1.92% | -7.42% | 12.61% | 6.53% | 1.95% |
| Return on equity (ROE) | -7.38% | -15.36% | 12.27% | 7.66% | -2.62% |
Western Digital Corporation's profitability ratios exhibit fluctuations over the past five years. The company's Operating Return on Assets (Operating ROA) has been inconsistent, ranging from a high of 9.11% in 2022 to a low of -5.24% in 2023, with a negative -1.31% in 2024. This indicates that the company's operational efficiency in generating profits from its assets has been volatile.
Return on Assets (ROA) also displays variability, with a positive peak of 5.71% in 2022 and negative values in the surrounding years. The negative -3.30% in 2024 signifies that the company's ability to generate profits relative to its total assets has been struggling in recent years.
Return on Total Capital reached its highest point in 2022 at 12.61% and has since fluctuated, providing a return of -1.92% in 2024. This ratio indicates the company's efficiency in generating returns for both debt and equity investors.
Return on Equity (ROE) has followed a similar trend, showcasing a peak of 12.27% in 2022 but declining to -7.38% in 2024. ROE reveals the company's capability to generate profits relative to the shareholders' equity invested in the business.
Overall, Western Digital Corporation's profitability ratios suggest a lack of consistency in generating returns for investors and utilizing assets efficiently to drive profitability. Monitoring these ratios moving forward will be crucial for assessing the company's financial performance and sustainability.