Warner Music Group (WMG)
Profitability ratios
Return on sales
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 11.82% | 10.05% | 14.50% | 11.07% | -5.13% |
| Operating profit margin | 12.88% | 13.44% | 11.73% | 11.54% | -5.13% |
| Pretax margin | 8.73% | 10.21% | 12.09% | 8.59% | -10.13% |
| Net profit margin | 6.81% | 7.31% | 9.05% | 5.76% | -10.64% |
Warner Music Group's profitability ratios have shown fluctuating trends over the past five years. The gross profit margin has generally increased from negative territory in 2020 to 11.82% in 2024, indicating an improvement in the efficiency of production and distribution. The operating profit margin, though slightly decreased in 2024 compared to the previous year, has remained relatively stable around 11-13%, reflecting the company's ability to control operating expenses effectively.
The pretax margin has shown a gradual decline from 12.09% in 2022 to 8.73% in 2024, possibly due to higher non-operating expenses or lower profitability before taxes. Similarly, the net profit margin has also decreased over the same period, suggesting that after-tax profitability has been impacted by various factors. Overall, Warner Music Group's profitability ratios demonstrate both positive and challenging aspects of their financial performance in recent years.
Return on investment
| Sep 30, 2024 | Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.99% | 9.25% | 9.12% | 8.45% | -3.57% |
| Return on assets (ROA) | 4.75% | 5.03% | 7.04% | 4.22% | -7.41% |
| Return on total capital | 18.16% | 18.50% | 18.38% | 18.03% | -7.53% |
| Return on equity (ROE) | 83.98% | 140.07% | 362.50% | 980.65% | — |
Warner Music Group's profitability ratios have shown improvement over the past five years. The Operating Return on Assets (Operating ROA) has remained relatively stable, ranging from 8.45% in 2021 to 9.25% in 2023, demonstrating efficient management in generating profits from its assets.
The Return on Assets (ROA) has also shown positive trends, with a gradual increase from 4.22% in 2021 to 5.03% in 2023, indicating the company's ability to generate profits relative to its total assets.
Furthermore, the Return on Total Capital has consistently improved, reaching 18.50% in 2023, reflecting the company's effective utilization of both debt and equity to generate returns.
The most notable improvement is seen in the Return on Equity (ROE), which surged from 83.98% in 2024 to 980.65% in 2021. This signifies that shareholders' equity has been highly profitable for the company in recent years, showcasing strong financial performance and value creation for its shareholders.