Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Alphabet Inc. (NASDAQ:GOOG)

Analysis of Profitability Ratios

Beginner level

Profitability Ratios (Summary)

Alphabet Inc., profitability ratios

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Return on Sales
Gross profit margin 55.58% 56.48% 58.88% 61.08% 62.44%
Operating profit margin 21.15% 19.24% 23.59% 26.27% 25.82%
Net profit margin 21.22% 22.46% 11.42% 21.58% 21.80%
Return on Investment
Return on equity (ROE) 17.05% 17.30% 8.30% 14.01% 13.59%
Return on assets (ROA) 12.45% 13.20% 6.42% 11.63% 11.09%

Based on: 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11).

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Alphabet Inc.’s gross profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Alphabet Inc.’s operating profit margin ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Alphabet Inc.’s net profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Alphabet Inc.’s ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
ROA A profitability ratio calculated as net income divided by total assets. Alphabet Inc.’s ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Gross Profit Margin

Alphabet Inc., gross profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Gross profit 89,961  77,270  65,272  55,134  46,825 
Revenues 161,857  136,819  110,855  90,272  74,989 
Profitability Ratio
Gross profit margin1 55.58% 56.48% 58.88% 61.08% 62.44%
Benchmarks
Gross Profit Margin, Competitors2
Adobe Inc. 85.03% 86.77% 86.16% 86.00% 84.48%
Autodesk Inc. 88.87% 85.25% 83.17% 85.20% 86.38%
Facebook Inc. 81.94% 83.25% 86.58% 86.29% 84.01%
International Business Machines Corp. 47.30% 46.41% 45.78% 47.92% 49.77%
Intuit Inc. 82.80% 83.62% 84.37% 83.98% 82.71%
Microsoft Corp. 65.90% 65.25% 61.91% 61.58% 64.70%
Oracle Corp. 79.76% 79.71% 80.20% 79.81% 80.30%
salesforce.com inc. 74.02% 73.54% 73.38% 75.18% 76.01%
ServiceNow Inc. 76.98% 76.13% 74.15% 71.33% 67.24%

Based on: 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11).

1 2019 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 89,961 ÷ 161,857 = 55.58%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Alphabet Inc.’s gross profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Operating Profit Margin

Alphabet Inc., operating profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Income from operations 34,231  26,321  26,146  23,716  19,360 
Revenues 161,857  136,819  110,855  90,272  74,989 
Profitability Ratio
Operating profit margin1 21.15% 19.24% 23.59% 26.27% 25.82%
Benchmarks
Operating Profit Margin, Competitors2
Adobe Inc. 29.25% 31.45% 29.69% 25.51% 18.83%
Autodesk Inc. -0.97% -24.75% -24.60% 0.05% 4.80%
Facebook Inc. 33.93% 44.62% 49.70% 44.96% 34.72%
International Business Machines Corp. 13.67% 16.61% 14.91% 16.40% 19.19%
Intuit Inc. 27.33% 25.10% 26.95% 26.46% 17.60%
Microsoft Corp. 34.14% 31.77% 24.82% 23.65% 19.41%
Oracle Corp. 34.26% 34.34% 33.69% 34.02% 36.29%
salesforce.com inc. 4.03% 2.25% 0.77% 1.72% -2.71%
ServiceNow Inc. 1.22% -1.63% -5.25% -30.41% -16.55%
Operating Profit Margin, Sector
Software & Computer Services 25.56% 25.90% 25.11% 24.75% 23.05%
Operating Profit Margin, Industry
Technology 25.96% 27.06% 25.45% 24.51% 25.17%

Based on: 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11).

1 2019 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenues
= 100 × 34,231 ÷ 161,857 = 21.15%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Alphabet Inc.’s operating profit margin ratio deteriorated from 2017 to 2018 but then slightly improved from 2018 to 2019.

Net Profit Margin

Alphabet Inc., net profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net income 34,343  30,736  12,662  19,478  16,348 
Revenues 161,857  136,819  110,855  90,272  74,989 
Profitability Ratio
Net profit margin1 21.22% 22.46% 11.42% 21.58% 21.80%
Benchmarks
Net Profit Margin, Competitors2
Adobe Inc. 26.42% 28.69% 23.20% 19.96% 13.13%
Autodesk Inc. -3.14% -27.56% -28.66% -13.20% 3.26%
Facebook Inc. 26.15% 39.60% 39.20% 36.97% 20.57%
International Business Machines Corp. 12.22% 10.97% 7.27% 14.86% 16.14%
Intuit Inc. 22.95% 20.31% 18.76% 20.86% 8.71%
Microsoft Corp. 31.18% 15.02% 23.57% 19.69% 13.03%
Oracle Corp. 28.05% 9.60% 24.74% 24.03% 26.00%
salesforce.com inc. 8.36% 1.22% 2.14% -0.71% -4.89%
ServiceNow Inc. 18.11% -1.02% -7.71% -32.49% -19.73%
Net Profit Margin, Sector
Software & Computer Services 23.18% 18.85% 17.49% 20.09% 17.26%
Net Profit Margin, Industry
Technology 22.90% 20.81% 18.50% 19.30% 19.31%

Based on: 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11).

1 2019 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 34,343 ÷ 161,857 = 21.22%

2 Click competitor name to see calculations.

Profitability ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Alphabet Inc.’s net profit margin ratio improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Return on Equity (ROE)

Alphabet Inc., ROE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net income 34,343  30,736  12,662  19,478  16,348 
Stockholders’ equity 201,442  177,628  152,502  139,036  120,331 
Profitability Ratio
ROE1 17.05% 17.30% 8.30% 14.01% 13.59%
Benchmarks
ROE, Competitors2
Adobe Inc. 28.03% 27.67% 20.02% 15.74% 8.99%
Autodesk Inc. -79.35% -20.41% 3.69%
Facebook Inc. 18.29% 26.28% 21.43% 17.26% 8.34%
International Business Machines Corp. 45.25% 51.96% 32.70% 65.07% 92.48%
Intuit Inc. 41.53% 51.44% 71.71% 84.32% 15.65%
Microsoft Corp. 38.35% 20.03% 29.29% 23.33% 15.23%
Oracle Corp. 50.87% 8.37% 17.33% 18.82% 20.42%
salesforce.com inc. 7.11% 1.36% 2.40% -0.95% -6.61%
ServiceNow Inc. 29.45% -2.40% -25.53% -116.76% -35.01%
ROE, Sector
Software & Computer Services 24.78% 19.89% 17.21% 19.52% 17.29%
ROE, Industry
Technology 29.77% 26.95% 20.11% 20.72% 22.51%

Based on: 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11).

1 2019 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 34,343 ÷ 201,442 = 17.05%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Alphabet Inc.’s ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Return on Assets (ROA)

Alphabet Inc., ROA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Selected Financial Data (US$ in millions)
Net income 34,343  30,736  12,662  19,478  16,348 
Total assets 275,909  232,792  197,295  167,497  147,461 
Profitability Ratio
ROA1 12.45% 13.20% 6.42% 11.63% 11.09%
Benchmarks
ROA, Competitors2
Adobe Inc. 14.22% 13.80% 11.65% 9.20% 5.37%
Autodesk Inc. -1.71% -13.78% -12.13% -5.99% 1.66%
Facebook Inc. 13.86% 22.72% 18.85% 15.73% 7.46%
International Business Machines Corp. 6.20% 7.07% 4.59% 10.11% 11.94%
Intuit Inc. 24.78% 23.39% 23.87% 23.04% 7.35%
Microsoft Corp. 13.69% 6.40% 8.80% 8.67% 6.92%
Oracle Corp. 10.20% 2.79% 6.92% 7.93% 8.96%
salesforce.com inc. 3.61% 0.61% 1.02% -0.37% -2.46%
ServiceNow Inc. 10.41% -0.69% -4.39% -22.22% -10.98%
ROA, Sector
Software & Computer Services 11.58% 9.45% 8.10% 9.90% 8.90%
ROA, Industry
Technology 12.84% 11.88% 9.15% 10.14% 11.33%

Based on: 10-K (filing date: 2020-02-04), 10-K (filing date: 2019-02-05), 10-K (filing date: 2018-02-06), 10-K (filing date: 2017-02-03), 10-K (filing date: 2016-02-11).

1 2019 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 34,343 ÷ 275,909 = 12.45%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Alphabet Inc.’s ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.