Essential Utilities Inc (WTRG)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 100.00% | 54.82% | 46.87% | 52.57% | 52.53% |
| Operating profit margin | 36.32% | 33.70% | 28.90% | 32.09% | 29.72% |
| Pretax margin | 27.49% | 21.02% | 19.71% | 22.47% | 18.12% |
| Net profit margin | 28.54% | 24.26% | 20.33% | 22.98% | 19.47% |
Essential Utilities Inc's profitability ratios have shown varying trends over the years based on the provided data.
1. Gross Profit Margin: Essential Utilities' gross profit margin has fluctuated over the years, with a decrease from 52.53% in 2020 to 46.87% in 2022, followed by a significant increase to 100.00% in 2024. This increase in gross profit margin in 2024 could indicate improved efficiency in cost management or potentially unusual accounting adjustments.
2. Operating Profit Margin: The operating profit margin has generally shown an increasing trend, starting at 29.72% in 2020 and reaching 36.32% in 2024. This suggests that Essential Utilities has been able to effectively control its operating expenses and improve operational efficiency over the years.
3. Pre-Tax Margin: The pre-tax margin has also demonstrated growth, rising from 18.12% in 2020 to 27.49% in 2024. This indicates that the company has been able to generate more income before accounting for taxes, potentially through increased revenue or improved cost management.
4. Net Profit Margin: Essential Utilities' net profit margin has been on an upward trajectory, increasing from 19.47% in 2020 to 28.54% in 2024. This consistent improvement signals that the company has been successful in controlling expenses, managing taxes, and growing its bottom line profitability.
In summary, Essential Utilities Inc has generally shown positive trends in its profitability ratios over the years, with improvements in operating efficiency and bottom-line profitability. However, the significant fluctuation in gross profit margin in 2022 and the unusually high gross profit margin in 2024 may warrant further investigation to understand the underlying reasons behind these fluctuations.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.20% | 4.11% | 4.21% | 4.11% | 3.17% |
| Return on assets (ROA) | 3.30% | 2.96% | 2.96% | 2.94% | 2.08% |
| Return on total capital | 14.13% | 12.13% | 12.45% | 11.77% | 9.81% |
| Return on equity (ROE) | 9.60% | 8.45% | 8.65% | 8.33% | 6.08% |
Essential Utilities Inc has shown a consistent improvement in its profitability ratios over the past five years.
- Operating return on assets (Operating ROA) increased from 3.17% in 2020 to 4.20% in 2024, indicating the company's ability to generate operating income relative to its total assets has been improving steadily.
- Return on assets (ROA) also displayed an upward trend, rising from 2.08% in 2020 to 3.30% in 2024, highlighting the efficiency of the company in utilizing its assets to generate profit.
- Return on total capital exhibited a significant increase from 9.81% in 2020 to 14.13% in 2024, indicating the company's ability to generate returns for both equity and debt holders has been improving consistently.
- Return on equity (ROE) demonstrated a similar upward trajectory, climbing from 6.08% in 2020 to 9.60% in 2024, reflecting the company's ability to generate returns for its shareholders.
Overall, Essential Utilities Inc's profitability ratios have shown positive growth, suggesting effective management and operational performance over the analyzed period.