Worthington Steel Inc (WS)
Profitability ratios
Return on sales
| May 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | |
|---|---|---|---|---|
| Gross profit margin | 12.82% | 9.43% | 9.72% | 17.43% |
| Operating profit margin | 5.67% | 3.53% | 5.57% | 10.41% |
| Pretax margin | 6.30% | 3.46% | 6.25% | 11.15% |
| Net profit margin | 4.51% | 2.33% | 4.43% | 8.04% |
Worthington Steel Inc's profitability has shown fluctuations over the past four years based on the analysis of key profitability ratios. The gross profit margin, which measures the percentage of revenue remaining after deducting cost of goods sold, was relatively low in 2023 and 2022 compared to 2021 and 2024. This indicates that the company may have faced challenges in controlling production costs during those years.
The operating profit margin, reflecting the proportion of revenue remaining after deducting both COGS and operating expenses, also experienced a fluctuating trend. The margin was relatively low in 2023 compared to the other years, suggesting that the company may have struggled to effectively manage its operating expenses during that period.
The pretax margin, which highlights the percentage of revenue that remains after all operating expenses as well as interest and taxes are deducted, followed a similar trend. 2023 and 2021 showed lower margins compared to 2022 and 2024, indicating potential difficulties in managing costs and expenses in those years.
Lastly, the net profit margin, which represents the percentage of revenue left after all deductions, including taxes, displayed a consistent decline from 2021 to 2023, before showing a slight improvement in 2024. This may suggest that the company faced challenges in generating profits efficiently during the middle years but managed to make some improvements in the most recent year.
Overall, the analysis of profitability ratios for Worthington Steel Inc indicates a mix of challenges and improvements in managing costs, expenses, and generating profits over the past four years. Further investigation into the underlying factors driving these trends would be warranted to understand the company's financial performance comprehensively.
Return on investment
| May 31, 2024 | Aug 31, 2023 | Aug 31, 2022 | Aug 31, 2021 | |
|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.42% | 7.23% | 10.87% | 16.21% |
| Return on assets (ROA) | 8.29% | 4.78% | 8.66% | 12.51% |
| Return on total capital | 0.00% | 15.39% | 17.98% | 34.07% |
| Return on equity (ROE) | 15.70% | 8.20% | 15.92% | 25.86% |
Based on the provided data, Worthington Steel Inc's profitability ratios show fluctuating trends over the past four years.
The Operating Return on Assets (Operating ROA) has shown a slight increase from 7.23% in August 2023 to 10.42% in May 2024. This ratio indicates that Worthington Steel is generating 10.42 cents of operating profit for every dollar of assets it owns, showing improved operational efficiency.
The Return on Assets (ROA) has also exhibited an upward trend from 4.78% in August 2023 to 8.29% in May 2024. This suggests that the company is generating a higher level of profit relative to its total assets, indicating improved asset utilization.
The Return on Total Capital showed a significant decrease from 15.39% in August 2023 to 0.00% in May 2024. A return of 0% on total capital may indicate that the company did not generate any profit from its total invested capital during the period, which is a concerning metric for investors.
Lastly, the Return on Equity (ROE) has also demonstrated fluctuating patterns, with an increase from 8.20% in August 2023 to 15.70% in May 2024. This ratio shows that for every dollar of equity invested, the company generated a return of 15.70%, reflecting improved profitability for shareholders.
Overall, while the Operating ROA and ROA ratios have shown improvements, the Return on Total Capital decline is a significant concern, suggesting that the company may need to reevaluate its capital allocation strategies. The Return on Equity metric indicates a positive trend, implying better performance for Worthington Steel Inc in terms of generating returns for its shareholders.