Watsco Inc (WSO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 26.58% | 26.40% | 26.52% | 26.92% | 27.35% | 27.70% | 27.82% | 27.78% | 27.91% | 27.88% | 27.92% | 27.34% | 26.55% | 25.96% | 25.17% | 24.50% | 24.19% | 24.15% | 24.05% | 24.15% |
| Operating profit margin | 10.06% | 9.81% | 9.94% | 10.21% | 10.83% | 11.35% | 11.21% | 11.30% | 11.13% | 11.05% | 11.02% | 10.44% | 10.01% | 9.71% | 9.25% | 8.44% | 7.93% | 7.71% | 7.28% | 7.36% |
| Pretax margin | 10.54% | 10.29% | 10.31% | 10.34% | 10.84% | 11.27% | 11.15% | 11.27% | 11.40% | 11.31% | 11.30% | 10.74% | 9.99% | 9.70% | 9.24% | 8.43% | 7.91% | 7.67% | 7.22% | 7.28% |
| Net profit margin | 7.04% | 6.99% | 7.02% | 7.03% | 7.36% | 8.14% | 7.86% | 7.75% | 7.68% | 6.94% | 6.98% | 6.62% | 6.17% | 5.92% | 5.63% | 5.16% | 4.82% | 4.74% | 4.45% | 4.51% |
Watsco Inc's profitability ratios have shown a positive trend over the years based on the provided data. The gross profit margin has been steadily increasing from 24.15% as of March 31, 2020, to 27.35% by December 31, 2023, before slightly decreasing to 26.58% as of December 31, 2024.
The operating profit margin has also exhibited growth, starting at 7.36% on March 31, 2020, and reaching a peak of 11.35% by September 30, 2023, before declining to 10.06% by December 31, 2024.
Similarly, the pretax margin improved consistently over the years, indicating efficient management of operating expenses and higher profitability. Starting at 7.28% on March 31, 2020, the pretax margin increased to 11.40% by December 31, 2022, before stabilizing around 10.54% by December 31, 2024.
Furthermore, the net profit margin, a key indicator of bottom-line performance, has shown a positive trajectory. It has been on an upward trend, increasing from 4.51% as of March 31, 2020, to a peak of 8.14% by September 30, 2023, before slightly decreasing to 7.04% by December 31, 2024.
Overall, the consistent improvement in these profitability ratios reflects Watsco Inc's ability to effectively manage costs, enhance operational efficiency, and drive sustainable growth in profitability over the analyzed period.
Return on investment
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 17.11% | 16.21% | 16.81% | 17.11% | 20.88% | 20.41% | 19.59% | 21.71% | 23.22% | 22.20% | 20.23% | 20.04% | 20.37% | 18.61% | 16.77% | 16.26% | 16.06% | 14.48% | 13.34% | 13.83% |
| Return on assets (ROA) | 11.97% | 11.55% | 11.87% | 11.78% | 14.19% | 14.64% | 13.74% | 14.89% | 16.02% | 13.95% | 12.80% | 12.71% | 12.56% | 11.35% | 10.21% | 9.94% | 9.76% | 8.91% | 8.16% | 8.47% |
| Return on total capital | 16.63% | 26.61% | 28.12% | 29.33% | 35.22% | 36.67% | 39.03% | 42.34% | 43.56% | 42.48% | 42.60% | 41.22% | 37.58% | 34.88% | 33.23% | 29.24% | 26.87% | 25.60% | 24.35% | 25.28% |
| Return on equity (ROE) | 11.97% | 19.36% | 19.99% | 20.32% | 24.05% | 26.59% | 27.67% | 29.34% | 29.58% | 26.20% | 26.44% | 25.59% | 23.28% | 21.32% | 20.29% | 17.94% | 16.40% | 15.84% | 14.97% | 15.57% |
Based on the provided data, we can analyze the profitability ratios of Watsco Inc as follows:
1. Operating Return on Assets (Operating ROA):
- The Operating ROA for Watsco Inc has shown a positive trend, increasing from 13.83% as of March 31, 2020, to a peak of 23.22% as of December 31, 2022. However, there was a decline to 17.11% by December 31, 2024.
2. Return on Assets (ROA):
- The ROA of Watsco Inc has also displayed a similar pattern of improvement, reaching its highest point of 16.02% as of December 31, 2022. Subsequently, the ratio declined slightly to 11.97% by December 31, 2024.
3. Return on Total Capital:
- The Return on Total Capital ratio for Watsco Inc experienced significant growth, peaking at 43.56% by December 31, 2022. However, there was a notable decrease to 16.63% by December 31, 2024, indicating a decrease in the efficiency of capital utilization.
4. Return on Equity (ROE):
- The ROE of Watsco Inc followed a similar trend to the other profitability ratios, showing an increase from 15.57% as of March 31, 2020, to a peak of 29.58% by December 31, 2022. The ratio then declined to 11.97% by December 31, 2024, reflecting a decrease in shareholder profitability.
In summary, Watsco Inc's profitability ratios generally exhibited an upward trend over the years, reaching their peak levels around the end of 2022. However, there was a decline in profitability metrics in the latter part of 2024, indicating a potential need for operational improvements to sustain and enhance profitability in the future.