Xerox Corp (XRX)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 70.91% | 70.80% | 3.79% | 72.89% | 69.26% |
| Operating profit margin | 47.98% | 48.00% | 48.92% | 50.95% | 42.36% |
| Pretax margin | -18.64% | -0.40% | -4.48% | -6.47% | 3.52% |
| Net profit margin | -20.25% | 0.01% | -4.44% | -6.24% | 2.64% |
Xerox Corp's profitability ratios exhibit fluctuations over the years. The gross profit margin has shown a significant increase from 69.26% in 2020 to 72.89% in 2021, signaling improved efficiency in production or pricing strategies. However, there was a substantial drop to 3.79% in 2022, which may indicate challenges in managing production costs or pricing pressures.
The operating profit margin also demonstrated positive growth, rising from 42.36% in 2020 to 50.95% in 2021, suggesting better control over operating expenses. The margin remained relatively stable around 48-49% from 2022 to 2024, indicating consistent operational efficiency.
In contrast, the pretax margin and net profit margin depict a concerning trend. The pretax margin deteriorated from 3.52% in 2020 to -6.47% in 2021, remaining negative until 2024. This suggests that Xerox struggled with generating profits before accounting for taxes, possibly due to declining revenues or increasing costs.
Similarly, the net profit margin fell from 2.64% in 2020 to -6.24% in 2021 and further to -20.25% in 2024. This indicates that after accounting for all expenses, including taxes, Xerox's profitability was under pressure, with consecutive years of losses.
Overall, while Xerox demonstrated improvements in gross and operating profit margins, the negative trend in pretax and net profit margins raises concerns about the company's ability to generate sustainable profits in the long term. Further analysis and strategic measures may be necessary to address profitability challenges and enhance overall financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 37.42% | 33.74% | 30.73% | 28.11% | 20.87% |
| Return on assets (ROA) | -15.79% | 0.01% | -2.79% | -3.44% | 1.30% |
| Return on total capital | -92.10% | 6.70% | -3.77% | -5.97% | 8.42% |
| Return on equity (ROE) | -122.77% | 0.04% | -9.63% | -10.26% | 3.43% |
The profitability ratios of Xerox Corp indicate fluctuating performance over the years.
1. Operating return on assets (Operating ROA) shows a positive trend, increasing from 20.87% in December 2020 to 37.42% in December 2024. This implies the company is generating higher operating profits from its assets over time.
2. Return on assets (ROA) had a mix of negative and positive values, ranging from -15.79% in December 2024 to 1.30% in December 2020. This indicates variability in the company's ability to generate profits from its total assets.
3. The return on total capital fluctuated significantly, with values ranging from -92.10% in December 2024 to 8.42% in December 2020. This suggests that the company faced challenges in generating returns on its total invested capital during these years.
4. Return on equity (ROE) also displayed inconsistency, with values from -122.77% in December 2024 to 3.43% in December 2020. This indicates varying profitability levels for the company's shareholders.
Overall, the profitability ratios highlight the need for Xerox Corp to focus on improving its efficiency in utilizing assets and generating returns for its investors to ensure sustained profitability in the future.