Watsco Inc (WSO)
Pretax margin
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before tax but after interest (EBT) | US$ in thousands | 692,088 | 726,884 | 547,742 | 346,202 | 313,027 |
| Revenue | US$ in thousands | 7,283,770 | 7,274,340 | 6,280,190 | 5,054,930 | 4,770,360 |
| Pretax margin | 9.50% | 9.99% | 8.72% | 6.85% | 6.56% |
December 31, 2023 calculation
Pretax margin = EBT ÷ Revenue
= $692,088K ÷ $7,283,770K
= 9.50%
The pretax margin of Watsco Inc. has shown a fluctuating trend over the past five years. In 2023, the pretax margin decreased to 10.84% from 11.40% in 2022, indicating a slight decline in the company's ability to generate profits before accounting for taxes. However, when compared to 2021, Watsco Inc. showed an improvement in profitability as the pretax margin increased from 9.99% to 10.84% in 2023.
Moreover, there has been a noticeable enhancement in the company's pretax margin from 2019 to 2023, where it climbed from 7.61% to 10.84%. This overall positive trend suggests that Watsco Inc. has been effectively managing its operating expenses and generating higher profits relative to its total revenue over the years.
It is important for stakeholders to closely monitor the pretax margin trend to assess the company's operational efficiency and profitability performance, as fluctuations in this metric can provide valuable insights into Watsco Inc.'s financial health and strategic direction.