Watsco Inc (WSO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 26.84% | 27.35% | 27.91% | 26.55% | 24.19% |
| Operating profit margin | 10.26% | 10.59% | 11.43% | 10.01% | 7.93% |
| Pretax margin | 10.54% | 10.84% | 11.40% | 9.99% | 7.91% |
| Net profit margin | 7.04% | 7.36% | 8.26% | 6.67% | 5.33% |
Watsco Inc's profitability ratios have shown a positive trend over the past five years. The gross profit margin has improved steadily from 24.19% in 2020 to 26.84% in 2024, indicating the company's ability to effectively control the cost of goods sold and generate higher margins on sales.
Similarly, the operating profit margin has also demonstrated growth, rising from 7.93% in 2020 to 10.26% in 2024. This suggests that Watsco Inc has been able to efficiently manage its operating expenses relative to its revenue.
The pretax margin has followed a similar upward trajectory, increasing from 7.91% in 2020 to 10.54% in 2024. This metric reflects the company's ability to generate profits before accounting for taxes, highlighting its operational efficiency and effectiveness in managing income and expenses.
The net profit margin, a key indicator of a company's overall profitability, has shown improvement as well, climbing from 5.33% in 2020 to 7.04% in 2024. This reveals that Watsco Inc has been successful in translating its revenues into net income after accounting for all expenses, including taxes.
Overall, Watsco Inc's profitability ratios have exhibited a positive trend, reflecting the company's ability to enhance its margins and profitability over the five-year period.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 17.45% | 20.69% | 23.84% | 20.37% | 16.06% |
| Return on assets (ROA) | 11.97% | 14.38% | 17.23% | 13.58% | 10.80% |
| Return on total capital | 28.28% | 35.64% | 44.02% | 37.75% | 26.98% |
| Return on equity (ROE) | 20.18% | 24.05% | 31.82% | 25.16% | 18.13% |
Watsco Inc's profitability ratios have shown a positive trend over the years based on the provided data.
- Operating Return on Assets (Operating ROA): Watsco Inc's Operating ROA has consistently improved from 16.06% in 2020 to 20.37% in 2021, further to 23.84% in 2022, before slightly decreasing to 20.69% in 2023 and 17.45% in 2024. This indicates the company's ability to generate operating profits from its assets.
- Return on Assets (ROA): The company's overall ROA has also displayed an upward trajectory, increasing from 10.80% in 2020 to 13.58% in 2021, then significantly rising to 17.23% in 2022, before moderating to 14.38% in 2023 and 11.97% in 2024. This shows how efficiently Watsco Inc is utilizing its assets to generate profits.
- Return on Total Capital: Watsco Inc's Return on Total Capital has notably enhanced over the years, climbing from 26.98% in 2020 to 37.75% in 2021, further to 44.02% in 2022, before declining to 35.64% in 2023 and 28.28% in 2024. This metric reflects the company's effectiveness in generating returns for both equity and debt holders.
- Return on Equity (ROE): The company's ROE has depicted an upward trend from 18.13% in 2020 to 25.16% in 2021, then to 31.82% in 2022, before settling at 24.05% in 2023 and 20.18% in 2024. This indicates the profitability of Watsco Inc from the perspective of its shareholders.
Overall, the profitability ratios of Watsco Inc demonstrate consistent improvements, indicating the company's efficient use of assets and capital to generate profits for both the company and its shareholders.