Stock Analysis on Net
Stock Analysis on Net

Parker-Hannifin Corp. (NYSE:PH)

This company has been moved to the archive! The financial data has not been updated since February 7, 2023.

Common-Size Income Statement 

Parker-Hannifin Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Jun 30, 2022 Jun 30, 2021 Jun 30, 2020 Jun 30, 2019 Jun 30, 2018 Jun 30, 2017
Net sales 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -71.79 -72.83 -75.11 -74.74 -75.25 -76.39
Gross profit 28.21% 27.17% 24.89% 25.26% 24.75% 23.61%
Selling, general and administrative expenses -10.26 -10.64 -12.10 -10.78 -11.59 -12.09
Gain (loss) on disposal of assets 0.04 0.76 0.01 -0.07 0.03 0.36
Operating income 18.00% 17.29% 12.80% 14.40% 13.19% 11.88%
Interest expense -1.61 -1.74 -2.25 -1.33 -1.50 -1.35
Other income (expense), net -6.21 0.12 0.49 0.43 0.20 0.51
Income before income taxes 10.18% 15.66% 11.04% 13.50% 11.90% 11.05%
Income taxes -1.88 -3.49 -2.23 -2.94 -4.48 -2.87
Net income 8.30% 12.18% 8.81% 10.56% 7.42% 8.18%
Noncontrolling interest in subsidiaries’ earnings 0.00 -0.01 0.00 0.00 0.00 0.00
Net income attributable to common shareholders 8.29% 12.17% 8.81% 10.56% 7.42% 8.18%

Based on: 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30), 10-K (reporting date: 2017-06-30).

The financial data reveals several noteworthy trends regarding profitability and cost management over the six-year period analyzed.

Gross Profit and Cost of Sales
Gross profit as a percentage of net sales has exhibited an overall increasing trend, rising from 23.61% in 2017 to 28.21% in 2022. Concurrently, the cost of sales has decreased steadily from -76.39% to -71.79% of net sales. This improvement in gross margin indicates enhanced production efficiency or favorable pricing strategies over the years.
Selling, General, and Administrative Expenses
SG&A expenses as a percentage of net sales generally declined, starting at -12.09% in 2017 and reaching -10.26% in 2022, despite some fluctuations such as a slight increase in 2020. This suggests better control over operational expenditures relative to sales.
Operating Income
Operating income showed a positive upward movement, increasing from 11.88% in 2017 to 18.00% in 2022. This growth aligns with the improved gross profit margin and controlled SG&A expenses, reflecting stronger operational profitability.
Interest Expense
Interest expenses fluctuated within a narrow band between -1.50% and -1.33% in the earlier years but increased notably to -2.25% in 2020, before decreasing back towards -1.61% in 2022. The spike in 2020 could relate to increased borrowing or changes in interest rates during that period.
Other Income (Expense), Net
This item was relatively minor and positive through 2021, averaging around 0.2% to 0.5% of net sales, but exhibited a sharp decline to -6.21% in 2022. This significant negative swing suggests an unusual or one-off expense or loss impacting the net income in 2022.
Income Before Income Taxes
Income before taxes gained strength from 11.05% in 2017 to a peak of 15.66% in 2021, but declined steeply to 10.18% in 2022, likely influenced by the adverse effects recorded in other income (expense), net.
Income Taxes
Income tax expense as a percentage of net sales varied over the years, peaking at -4.48% in 2018 and falling to its lowest point of -1.88% in 2022. The tax expense proportion has generally declined, potentially reflecting changes in tax rates or tax planning strategies.
Net Income
Net income attributable to common shareholders followed a pattern similar to income before taxes. It notably increased from 8.18% in 2017 to 12.17% in 2021, before decreasing substantially to 8.29% in 2022. The spike in 2021 indicates a strong earnings year, while the drop in 2022 highlights reduced profitability, in line with other adverse financial movements.

In summary, the company demonstrated consistent improvement in profitability margins and operational cost control through 2021, culminating in peak operating and net income ratios. However, the significant negative adjustment in other income (expense), net in 2022 contributed to diminished pre-tax and net income figures, interrupting the otherwise positive trend. Interest expense variability and declining tax rates also influenced overall profitability dynamics during the period reviewed.