Worthington Steel Inc (WS)
Profitability ratios
Return on sales
| May 31, 2025 | May 31, 2024 | Aug 31, 2023 | May 31, 2023 | Aug 31, 2022 | |
|---|---|---|---|---|---|
| Gross profit margin | 12.56% | 12.82% | 9.43% | 9.43% | 9.72% |
| Operating profit margin | 4.75% | 5.67% | 3.53% | 3.53% | 5.57% |
| Pretax margin | 4.79% | 6.30% | 3.46% | 3.46% | 6.25% |
| Net profit margin | 3.58% | 4.51% | 2.33% | 2.41% | 4.43% |
The profitability ratios of Worthington Steel Inc. over the specified periods exhibit several notable trends and shifts indicating the company's evolving financial performance.
Starting with the Gross Profit Margin, the margins remained relatively stable from August 31, 2022, through August 31, 2023, at approximately 9.72% and 9.43%, respectively. This stability suggests consistent core sales profitability during this period. However, a significant improvement is observed by May 31, 2024, with the margin rising to 12.82%, and it slightly decreases to 12.56% by May 31, 2025. The increase indicates enhanced efficiency in production costs or improved pricing strategies, positively impacting gross profitability.
In terms of Operating Profit Margin, there is a notable decline from 5.57% in August 2022 to 3.53% in May 2023 and August 2023, reflecting decreased operational efficiency or increased operating expenses during this period. Subsequently, the margin improves to 5.67% by May 31, 2024, before declining again to 4.75% by May 2025. These fluctuations suggest that while the company faced some operational challenges, it managed to recover some profitability, though not reaching prior peak levels.
The Pretax Margin mirrors the trend seen in operating profit margins. It decreased from 6.25% in August 2022 to 3.46% in May 2023 and August 2023, then improved to 6.30% in May 2024 and decreased again to 4.79% in May 2025. This pattern indicates that changes in operating efficiency and non-operating factors influenced profitability before taxes, with periods of recovery and setback.
The Net Profit Margin follows a similar trajectory. It declined from 4.43% in August 2022 to 2.41% in May 2023 and 2.33% in August 2023. The margin then increased to 4.51% by May 31, 2024, before dropping again to 3.58% by May 31, 2025. These figures reflect the net profitability after all expenses and taxes, with temporary recoveries following periods of decline.
Overall, the analysis of Worthington Steel Inc.'s profitability ratios indicates periods of financial strain, particularly noticeable in early 2023, with subsequent improvements in gross margin and pretax margin by mid-2024, though operating and net margins remain somewhat volatile. The gross profit margin's notable rise in predicting increased gross profitability suggests possible improvements in cost management or pricing, while the fluctuations in operating, pretax, and net margins reflect variability in operational efficiency, expenses, and possibly external economic factors affecting overall profitability.
Return on investment
| May 31, 2025 | May 31, 2024 | Aug 31, 2023 | May 31, 2023 | Aug 31, 2022 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.49% | 10.42% | 7.23% | 7.23% | 10.87% |
| Return on assets (ROA) | 5.64% | 8.29% | 4.78% | 4.94% | 8.66% |
| Return on total capital | 0.00% | 22.55% | 15.39% | 13.19% | 17.98% |
| Return on equity (ROE) | 10.31% | 15.70% | 8.20% | 8.46% | 15.92% |
The profitability ratios of Worthington Steel Inc. exhibit notable fluctuations over the reported periods, reflecting variations in operational efficiency and overall financial performance.
The Operating Return on Assets (Operating ROA) demonstrates a decline from 10.87% as of August 31, 2022, to 7.23% by May 31, 2023, remaining constant through August 31, 2023. A subsequent improvement is observed, with the ratio increasing to 10.42% by May 31, 2024, before decreasing again to 7.49% in the following period. These movements suggest moderate sensitivity of operating efficiency to market or internal factors, with a visible dip around 2023 followed by a rebound.
The Return on Assets (ROA), which includes net income considerations beyond operating results, follows a similar pattern. It declines from 8.66% in August 2022 to 4.94% in May 2023, stabilizes slightly at 4.78% by August 2023, then improves markedly to 8.29% in May 2024, before decreasing again to 5.64% in the subsequent period. These shifts could indicate affecting factors such as changes in net profitability or asset base utilization over time.
Return on Total Capital peaks at 17.98% on August 31, 2022, before declining to 13.19% in May 2023, with a subsequent increase to 15.39% by August 2023. However, a significant jump occurs in the next period, reaching 22.55% by May 2024, before plummeting to 0.00% in May 2025, which may imply extraordinary circumstances or perhaps data anomalies affecting the measurement of total capital returns.
Return on Equity (ROE) indicates a downward trend from 15.92% in August 2022 to 8.46% in May 2023, then stabilizes slightly at 8.20% in August 2023. A recovery is observed in May 2024 when ROE increases to 15.70%, but it decreases again to 10.31% by May 2025. This pattern reflects fluctuations in net profitability relative to shareholders’ equity, aligning with overall profitability trends.
Overall, Worthington Steel Inc.'s profitability ratios reveal periods of decline and recovery, indicating varying operational performance and possibly shifting market conditions. The rise in the May 2024 ratios suggests a temporary improvement, but the subsequent variability underscores the company's susceptibility to internal and external factors affecting profitability.