The Wendy’s Co (WEN)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 35.17% | 35.59% | 34.40% | 36.81% | 35.84% |
| Operating profit margin | 16.53% | 17.51% | 16.86% | 19.34% | 15.53% |
| Pretax margin | 12.13% | 12.81% | 11.62% | 12.68% | 8.81% |
| Net profit margin | 8.65% | 9.37% | 8.46% | 10.56% | 6.80% |
The Gross Profit Margin for The Wendy's Co has shown a slight improvement over the years, increasing from 35.84% in December 2020 to 35.17% in December 2024. This indicates that the company is effectively managing its production costs and generating more revenue relative to the cost of goods sold.
The Operating Profit Margin has fluctuated during the same period, with a notable increase from 15.53% in December 2020 to 19.34% in December 2021, followed by a slight decline to 16.53% in December 2024. This suggests that the company's operating efficiency may have improved initially but faced some challenges in maintaining profitability in the later years.
The Pretax Margin has also shown some variability, rising from 8.81% in December 2020 to 12.68% in December 2021 before moderating to 12.13% in December 2024. This indicates the company's ability to manage its expenses and generate profit before accounting for taxes.
The Net Profit Margin for The Wendy's Co has demonstrated a general upward trend, increasing from 6.80% in December 2020 to 8.65% in December 2024. This suggests that the company has been successful in managing its other expenses and taxes to improve its bottom line profitability.
Overall, The Wendy's Co has shown a mix of improvements and fluctuations in its profitability margins over the years, indicating varying degrees of success in managing costs, operations, and overall financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.38% | 7.37% | 6.42% | 7.19% | 5.34% |
| Return on assets (ROA) | 3.86% | 3.94% | 3.23% | 3.93% | 2.34% |
| Return on total capital | 152.80% | 130.25% | 78.55% | 67.01% | 46.43% |
| Return on equity (ROE) | 74.94% | 66.00% | 38.09% | 45.92% | 21.44% |
The profitability ratios for The Wendy's Co show a positive trend over the five-year period from 2020 to 2024.
1. Operating return on assets (Operating ROA) increased from 5.34% in 2020 to 7.38% in 2024, indicating the company's ability to generate operating profits from its assets improved over the years.
2. Return on assets (ROA) also saw an upward trend, rising from 2.34% in 2020 to 3.86% in 2024. This metric demonstrates the company's efficiency in generating profits relative to its total assets.
3. Return on total capital exhibited significant growth, soaring from 46.43% in 2020 to 152.80% in 2024. This measure highlights how effectively the company is utilizing its total capital to generate returns for its stakeholders.
4. Return on equity (ROE) showed a consistent increase, climbing from 21.44% in 2020 to 74.94% in 2024. This ratio reflects the company's ability to generate profits for its shareholders from the equity invested in the business.
Overall, The Wendy's Co displayed improved profitability performance over the five-year period, with increasing ratios indicating effective management of assets and capital to generate returns for both the company and its shareholders.