Warner Music Group (WMG)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 10.05% | 14.50% | 11.07% | -5.13% | 7.96% |
| Operating profit margin | 13.44% | 11.73% | 11.54% | -5.13% | 7.96% |
| Pretax margin | 10.21% | 12.09% | 8.59% | -10.13% | 5.92% |
| Net profit margin | 7.31% | 9.05% | 5.76% | -10.64% | 5.72% |
Warner Music Group's profitability ratios have shown fluctuations over the past five years. The gross profit margin has ranged from a low of -5.13% in 2020 to a high of 14.50% in 2022, indicating variability in the company's ability to generate profits after accounting for the cost of goods sold.
Similarly, the operating profit margin has fluctuated, with a negative figure in 2020 and a peak of 13.44% in 2023, suggesting changes in the company's efficiency in managing operating expenses and generating operating income.
The pretax margin has also exhibited variability, ranging from a low of -10.13% in 2020 to a high of 12.09% in 2022. This ratio reflects Warner Music Group's ability to generate profits before accounting for taxes relative to its total revenue.
The net profit margin has shown a similar pattern of fluctuations, with a negative figure in 2020 and a high of 9.05% in 2022. This ratio represents the company's bottom-line profitability after all expenses, including taxes, have been deducted.
Overall, Warner Music Group's profitability ratios have displayed volatility over the years, indicating the company's varying ability to generate profits at different stages. Investors should consider these trends alongside other financial metrics when evaluating the company's performance and future prospects.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.25% | 9.12% | 8.45% | -3.57% | 5.92% |
| Return on assets (ROA) | 5.03% | 7.04% | 4.22% | -7.41% | 4.25% |
| Return on total capital | 18.50% | 18.38% | 18.03% | -7.53% | 13.26% |
| Return on equity (ROE) | 140.07% | 362.50% | 980.65% | — | — |
Warner Music Group's profitability ratios show mixed performance over the past five years. The Operating Return on Assets (Operating ROA) has demonstrated a generally positive trend, increasing from 5.92% in 2019 to 9.25% in 2023, indicating an improvement in the company's ability to generate operating profits from its assets.
The Return on Assets (ROA) has also displayed variability, with a significant decline in 2020 to -7.41%, followed by a recovery to 5.03% in 2023. This ratio suggests that Warner Music Group has been experiencing fluctuations in its overall profitability relative to its total assets, but has shown signs of improvement in recent years.
Return on Total Capital has been relatively stable, with a consistent upward trend from -7.53% in 2020 to 18.50% in 2023. This metric signifies the company's ability to generate returns from both equity and debt capital invested in the business.
The Return on Equity (ROE) figures exhibit significant fluctuations, with extremely high returns in 2021 and 2022, reflecting a substantial increase in profitability compared to the previous years. However, the absence of ROE data for 2020 and the lack of context limit a holistic evaluation of Warner Music Group's performance in relation to its shareholders' equity.
Overall, Warner Music Group's profitability ratios indicate a mixed performance, with improvements in operating efficiency and capital returns, but variations in overall profitability and shareholder returns over the examined period.