Deckers Outdoor Corp. (NYSE:DECK)

Return on Assets (ROA)

The Return on Assets exhibits a generally upward trend from 9.05% in 2018 to 20.22% in 2023, indicating improved efficiency in asset utilization over the period. A notable increase occurred between 2018 and 2019, rising to 18.52%, followed by a slight dip in 2020 to 15.64%, before continuing a steady increase through 2023.

Financial Leverage

Financial Leverage remained relatively stable, fluctuating within a narrow range between 1.34 and 1.55 over the six-year period. The highest leverage ratio was recorded in 2020 at 1.55, with a slight decline in subsequent years, reaching 1.45 in 2023. This suggests a consistent approach to leveraging without significant increases in debt relative to equity.

Return on Equity (ROE)

The Return on Equity shows strong growth overall, climbing from 12.16% in 2018 to a peak of 29.37% in 2022 before a marginal decrease to 29.27% in 2023. This represents a substantial improvement in the company’s ability to generate profits from shareholders' equity. The trend closely parallels improvements in ROA, indicating enhanced profitability supported by stable financial leverage.

Net Profit Margin

The net profit margin demonstrated a significant improvement from 6.01% in 2018 to a peak of 15.03% in 2021. Following this peak, the margin slightly declined but remained relatively stable around 14.3% through 2022 and 2023. This indicates enhanced profitability over the period, with efficient cost and expense management contributing to strong bottom-line results.

Asset Turnover

Asset turnover experienced a gradual decline from 1.51 in 2018 to 1.17 in 2021, reflecting decreasing efficiency in generating revenue from assets. However, from 2021 onwards, there was a reversal of this trend, with asset turnover increasing to 1.35 in 2022 and further to 1.42 in 2023. This suggests a recovery in asset utilization effectiveness in the later years.

Financial Leverage

Financial leverage generally increased from 1.34 in 2018 to a high of 1.55 in 2020, implying greater use of debt or other financial obligations relative to equity during that period. After 2020, leverage decreased slightly and stabilized around 1.45 by 2023. This indicates a moderate reduction in reliance on borrowed funds while maintaining an elevated leverage level compared to the beginning of the period.

Return on Equity (ROE)

Return on equity showed a significant upward trend from 12.16% in 2018 to a high of 29.37% in 2022, with a slight decrease to 29.27% in 2023. The doubling of ROE over the six-year span reflects improved profitability combined with asset management and financial leverage strategies. The sustained elevated ROE levels in the most recent years indicate strong value generation for shareholders.

Overall Analysis

The data reveals consistent enhancements in profitability and shareholder returns from 2018 to 2023. Despite a dip in asset turnover through 2021, the company showed a rebound in asset efficiency subsequently. Rising financial leverage up to 2020 suggests increased borrowing to fuel growth, which slightly tempered in the later years. The interplay of these factors culminated in a robust and sustained increase in return on equity, underscoring effective management in balancing profitability, operational efficiency, and financial structure.

Tax Burden

The Tax Burden ratio exhibits an overall upward trend from 0.52 in 2018 to a peak of 0.81 in 2020, followed by slight fluctuations stabilizing around 0.78 in 2023. This pattern suggests an increasing proportion of pre-tax income retained after taxes, indicating improved tax efficiency or favorable tax conditions over the period.

Interest Burden

The Interest Burden remains consistently high and stable, close to 1.00 throughout the period. This stability reflects a consistent interest expense relative to EBIT, implying effective debt management with minimal impact of interest expenses on earnings before tax.

EBIT Margin

The EBIT Margin shows an improving trend, rising from 11.84% in 2018 to a peak of nearly 20% in 2021. A slight decline occurs in 2022, but it recovers marginally in 2023 to 18.46%. This overall growth suggests enhanced operational efficiency and profitability at the earnings before interest and taxes level.

Asset Turnover

Asset Turnover declines from 1.51 in 2018 to 1.17 in 2021, indicating reduced efficiency in generating sales from assets. However, a recovery trend is visible in 2022 and 2023 as the ratio increases back to 1.42, signaling renewed improvement in asset utilization efficiency.

Financial Leverage

Financial Leverage increases from 1.34 in 2018 to a peak of 1.55 in 2020, then slightly decreases to 1.45 by 2023. This pattern suggests a growing reliance on debt financing initially, followed by a moderate reduction in leverage, indicating cautious balance sheet management.

Return on Equity (ROE)

Return on Equity exhibits significant growth from 12.16% in 2018 to nearly 30% in 2022, maintaining a similar level in 2023. This upward trend reflects enhanced overall profitability and value creation for shareholders, driven by improvements in operational performance, asset utilization, and financial leverage.

Net Profit Margin

The net profit margin exhibited a notable improvement from 6.01% in 2018 to a peak of 15.03% in 2021, indicating enhanced profitability and operational efficiency over this period. Following the peak, the margin slightly declined but remained stable around the 14% range in 2022 and 2023, suggesting a maintained strong profitability level despite marginal fluctuations.

Asset Turnover

Asset turnover demonstrated a declining trend from 1.51 in 2018 to the lowest point of 1.17 in 2021, reflecting a reduction in efficiency with which the company utilized its assets to generate revenue. However, from 2021 onwards, asset turnover showed a recovery, increasing back to 1.42 by 2023. This rebound indicates an improvement in asset utilization efficiency in the most recent years.

Return on Assets (ROA)

Return on assets followed an overall upward trajectory, starting at 9.05% in 2018 and increasing significantly to 20.22% in 2023. Despite some fluctuations, notably a dip in 2020, ROA consistently improved year-over-year from 2020 onwards. This trend reflects both enhanced profitability and more efficient asset use, culminating in a strong return for the company in the latest reported period.

The analysis of the financial ratios reveals several notable trends over the six-year period ending March 31, 2023.

Tax Burden

The Tax Burden ratio increased markedly from 0.52 in 2018 to a peak around 0.81 in 2020. From 2020 onward, it remained relatively stable, fluctuating slightly between 0.76 and 0.8, before slightly declining to 0.78 in 2023. This rising and stabilizing pattern suggests that the effective tax rate increased significantly after 2018 and maintained a higher level in subsequent years.

Interest Burden

This ratio showed remarkable stability throughout the period, consistently near 1.0, with a very slight variation between 0.98 and 1.0. This implies that interest expenses had a minimal impact on earnings before tax, indicating strong control over interest-related costs or low levels of debt interest expense relative to operating income.

EBIT Margin

The EBIT margin exhibited a clear upward trend from 11.84% in 2018 to a high of 19.94% in 2021, indicating improved operational profitability. After peaking, it slightly decreased to 17.99% in 2022 but rose again marginally to 18.46% in 2023. This overall positive trajectory reflects enhanced efficiency or pricing power contributing to better earnings from core operations.

Asset Turnover

The Asset Turnover ratio decreased from 1.51 in 2018 to a low of 1.17 in 2021, suggesting a reduction in the efficiency of asset utilization during this timeframe. However, the ratio improved thereafter, increasing to 1.35 in 2022 and 1.42 in 2023, indicating a recovery in asset usage efficiency in the most recent years.

Return on Assets (ROA)

The ROA showed a substantial rise from 9.05% in 2018 to 18.52% in 2019, then fluctuated moderately between 15.64% and 20.22% over the following years. It peaked at 20.22% in 2023. This pattern suggests a significant enhancement in the company's ability to generate profit from its assets, driven by improved operational results and more effective asset management in later years.

The analysis of the financial ratios over the six-year period reveals several notable trends in profitability and burdens related to interest and taxation.

Tax Burden

The tax burden ratio exhibited a significant increase from 0.52 in 2018 to a peak around 0.8 in 2019, maintaining a relatively stable level between 0.76 and 0.81 through 2023, indicating a consistent proportion of earnings retained after tax in recent years.

Interest Burden

The interest burden ratio remained very stable and close to unity, varying marginally between 0.98 and 1.00 throughout the period. This reflects a minimal impact of interest expenses on earnings before tax, suggesting the company sustained a low-interest cost environment or maintained stable debt-related expenses.

EBIT Margin

The EBIT margin showed an upward trend, starting at 11.84% in 2018 and increasing to 18.46% by 2023. Although there was a slight dip from the peak of 19.94% in 2021 to 17.99% in 2022, the overall growth in EBIT margin indicates improved operational efficiency and profitability before interest and taxes over the years.

Net Profit Margin

The net profit margin mirrored the positive trend, rising markedly from 6.01% in 2018 to reach a plateau around 14-15% between 2019 and 2023. This improvement reflects enhanced capacity to convert sales into net earnings, despite minor fluctuations in later years. The margin remained relatively stable from 2021 onward, indicating consistent bottom-line profitability.

Overall, the company demonstrated sustained improvements in both operating and net profitability. The stability in interest burden alongside moderate tax burden ratios supports a favorable financial structure, contributing to solid profit margins over the analyzed period.