Olympic Steel Inc (ZEUS)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 13.12% | 12.27% | 15.07% | 11.04% | 11.04% |
| Operating profit margin | 3.60% | 5.22% | 7.44% | 0.05% | 1.05% |
| Pretax margin | 2.85% | 4.83% | 7.11% | -0.56% | 0.33% |
| Net profit margin | 2.06% | 3.55% | 5.22% | -0.45% | 0.24% |
Olympic Steel Inc.'s profitability ratios have shown varying trends over the past five years. The gross profit margin has fluctuated, ranging from 18.93% in 2019 to 22.07% in 2021, with a noticeable increase from 2022 to 2023 at 18.99% to 21.94%, indicating an improvement in the company's ability to generate profits after accounting for the cost of goods sold.
The operating profit margin has also varied significantly, with a sharp increase from 2020 to 2021 and a subsequent decline in 2023. The highest operating profit margin of 7.46% was recorded in 2021, demonstrating the company's ability to manage its operating expenses efficiently. However, the operating profit margin decreased to 3.60% in 2023, indicating a potential increase in operating expenses or a decline in operating income.
Similarly, the pre-tax margin has shown fluctuations over the years, with the company reporting a negative pre-tax margin in 2020 and a significant improvement in 2021. The pretax margin decreased from 7.13% in 2021 to 2.85% in 2023, potentially indicating higher tax expenses or lower pre-tax profits.
The net profit margin, which reflects the company's bottom-line profitability after accounting for all expenses, has also varied considerably. The negative net profit margin in 2020 improved significantly in 2021 and 2022 but declined again in 2023. The net profit margin decreased from 5.24% in 2022 to 2.06% in 2023, suggesting that Olympic Steel Inc. may be facing challenges in managing its expenses or may have experienced a decrease in net income.
Overall, while Olympic Steel Inc. has shown improvements in certain profitability ratios over the years, such as the gross profit margin and the operating profit margin, the declining trend in the pre-tax margin and net profit margin in recent years highlights the importance of closely monitoring and managing the company's expenses and profitability to ensure sustained financial performance.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 7.89% | 15.00% | 16.85% | 0.06% | 2.56% |
| Return on assets (ROA) | 4.52% | 10.20% | 11.83% | -0.55% | 0.59% |
| Return on total capital | 10.42% | 19.62% | 22.93% | 0.10% | 3.31% |
| Return on equity (ROE) | 8.02% | 17.62% | 28.52% | -1.32% | 1.25% |
Based on the provided profitability ratios for Olympic Steel Inc., we can observe the following trends:
1. Operating Return on Assets (Operating ROA): The company's operating ROA has shown a declining trend from 2019 to 2023, indicating a decrease in the efficiency of utilizing its assets to generate operating profits.
2. Return on Assets (ROA): The ROA has also exhibited a decreasing trend during the same period, with negative returns in 2020 followed by a gradual improvement. However, the ROA remains below the levels seen in 2019 and 2021.
3. Return on Total Capital: Olympic Steel Inc.'s return on total capital has followed a similar pattern to the ROA, showing a dip in performance in 2020 but gradually recovering in the subsequent years. The current ratio is comparable to that of 2019, reflecting a moderate return on invested capital.
4. Return on Equity (ROE): The ROE has fluctuated significantly, with negative returns in 2020 followed by a substantial increase in 2021 and a subsequent decline in 2023. This indicates volatility in the company's profitability relative to its shareholders' equity.
In summary, Olympic Steel Inc. has experienced fluctuations in its profitability ratios over the years, with varying levels of returns on assets, capital, and equity. The company may need to focus on improving asset efficiency and overall profitability to enhance shareholder value and financial performance.