Analysis of Investments
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- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Aggregate Accruals
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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Amgen Inc., adjustment to net income
US$ in millions
| 12 months ended: | Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|---|---|---|
| Net income (as reported) | ||||||
| Add: Gains (losses) on available-for-sale securities | ||||||
| Net income (adjusted) |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The reported net income demonstrates fluctuation over the five-year period. Initial growth from 2021 to 2023 is followed by a significant decrease in 2024, with a subsequent recovery in 2025. A noteworthy observation is the consistent alignment between reported net income and adjusted net income across all reported years.
- Net Income Trend
- Net income increased from US$5,893 million in 2021 to US$6,552 million in 2022, representing a growth of approximately 11.1%. Further growth occurred between 2022 and 2023, with net income reaching US$6,717 million, a 2.5% increase. A substantial decline is then observed in 2024, with net income falling to US$4,090 million, a decrease of approximately 39.1%. Finally, net income recovers significantly in 2025, reaching US$7,711 million, representing an 88.5% increase from the prior year.
- Adjustment Impact
- The adjustment to net income, specifically related to mark-to-market changes in available-for-sale securities, appears to have no impact on the final net income figure in any of the reported years. The reported net income and adjusted net income values are identical for each year, indicating that any gains or losses from these securities fully offset each other or are immaterial to the overall net income calculation.
The volatility in net income, particularly the sharp decline in 2024 and subsequent recovery in 2025, warrants further investigation to understand the underlying drivers. However, based solely on this information, the mark-to-market adjustment of available-for-sale securities does not appear to be a contributing factor to these fluctuations.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Amgen Inc., adjusted profitability ratios
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The reported and adjusted profitability ratios demonstrate notable fluctuations over the five-year period. While reported and adjusted values are identical for each metric across all years, an examination of the trends reveals key observations regarding the company’s performance. A significant decline in reported and adjusted profitability is observed in 2024, followed by a partial recovery in 2025.
- Net Profit Margin
- The net profit margin exhibited an increase from 24.25% in 2021 to 26.42% in 2022. This was followed by a slight decrease to 24.96% in 2023. A substantial drop occurred in 2024, with the margin falling to 12.77%. The final year, 2025, showed a recovery to 21.94%, though it did not reach the levels observed in the earlier years of the period.
- Return on Equity (ROE)
- Return on Equity experienced a dramatic increase from 87.96% in 2021 to 178.97% in 2022. This high level was maintained in 2023 at 107.78%, before declining sharply to 69.59% in 2024. A subsequent increase was noted in 2025, bringing the ROE to 89.06%, but still below the 2022 peak.
- Return on Assets (ROA)
- Return on Assets showed a modest increase from 9.63% in 2021 to 10.06% in 2022. A decline was then observed in 2023, falling to 6.91%. The most significant decrease occurred in 2024, with ROA reaching 4.45%. A recovery was evident in 2025, with ROA rising to 8.51%, though remaining below the initial values.
The consistency between reported and adjusted values suggests that mark-to-market adjustments for available-for-sale securities did not materially impact the reported profitability metrics during this period. The pronounced dip in all three ratios in 2024 warrants further investigation to determine the underlying causes, while the partial recovery in 2025 indicates a potential stabilization of performance.
Amgen Inc., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Net profit margin = 100 × Net income ÷ Product sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Product sales
= 100 × ÷ =
The reported and adjusted net profit margins exhibit similar trends over the five-year period. A period of growth is followed by a significant decline and subsequent recovery. The initial years demonstrate increasing profitability, followed by a substantial decrease, and then a return towards prior levels.
- Overall Trend
- From 2021 to 2022, both the reported and adjusted net profit margins increased, moving from 24.25% to 26.42%. This indicates improved profitability during this timeframe. However, 2023 saw a slight decrease to 24.96%, foreshadowing a more significant shift in the following year.
- Significant Decline (2024)
- A marked decline occurred in 2024, with both reported and adjusted net profit margins falling to 12.77%. This represents a substantial decrease from the previous years and suggests a significant challenge to profitability. The reasons for this decline would require further investigation, potentially involving analysis of revenue, cost of goods sold, and operating expenses.
- Recovery (2025)
- The final year analyzed, 2025, shows a recovery in profitability, with both reported and adjusted net profit margins rising to 21.94%. While this represents an improvement, the margin remains below the levels observed in 2021 and 2022, indicating that the company has not fully recovered to its previous performance levels.
- Consistency between Reported and Adjusted Values
- The reported and adjusted net profit margins are identical across all reported years. This suggests that adjustments made to net income do not materially impact the overall profitability metric. This consistency could indicate that the adjustments are relatively minor or do not relate to core operational performance.
In summary, the period demonstrates a cyclical pattern of growth, decline, and partial recovery in net profit margins. The substantial drop in 2024 warrants further scrutiny to understand the underlying causes and assess the sustainability of the recovery observed in 2025.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × ÷ =
The analysis reveals a fluctuating pattern in both reported and adjusted net income and return on equity over the five-year period. Reported and adjusted net income values are nearly identical each year, indicating minimal adjustments are being made to reported earnings. Return on equity (ROE), both reported and adjusted, demonstrates significant volatility.
- Reported Net Income
- Reported net income increased from US$5,893 million in 2021 to US$6,552 million in 2022, and then slightly increased to US$6,717 million in 2023. A substantial decrease is observed in 2024, falling to US$4,090 million, followed by a significant recovery to US$7,711 million in 2025.
- Adjusted Net Income
- Adjusted net income mirrors the trend of reported net income precisely, with values of US$5,892 million, US$6,552 million, US$6,717 million, US$4,090 million, and US$7,711 million for the years 2021 through 2025, respectively. The consistency between reported and adjusted figures suggests that adjustments are not materially impacting the overall profitability picture.
- Reported ROE
- Reported ROE experienced considerable fluctuation. It began at 87.96% in 2021, surged to 178.97% in 2022, decreased to 107.78% in 2023, then declined sharply to 69.59% in 2024. A recovery to 89.06% is noted in 2025. The volatility suggests sensitivity to changes in net income and/or equity.
- Adjusted ROE
- Adjusted ROE follows the exact same pattern as reported ROE, with values of 87.94%, 178.97%, 107.78%, 69.59%, and 89.06% for the years 2021 through 2025, respectively. This alignment with reported ROE reinforces the observation that adjustments to net income are not driving changes in the return on equity metric.
The significant drop in ROE in 2024, coinciding with the decrease in net income, warrants further investigation to understand the underlying causes. The subsequent recovery in 2025 suggests a potential rebound in profitability. The close correlation between reported and adjusted ROE indicates that the core drivers of profitability, as reflected in net income, are the primary determinants of the observed ROE trends.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =
The financial performance, as indicated by reported and adjusted return on assets, exhibits fluctuations over the five-year period. Reported net income and adjusted net income are identical across all years, suggesting no significant adjustments were made to net income. Consequently, reported ROA and adjusted ROA values are also identical.
- Overall Trend
- A general pattern of increase followed by a substantial decrease and subsequent recovery is observed in ROA. The metric initially rose from 9.63% in 2021 to a peak of 10.06% in 2022, before declining sharply to 4.45% in 2024. A recovery to 8.51% is then noted in 2025.
- Year-over-Year Changes
- From 2021 to 2022, ROA increased by 0.43 percentage points. This positive movement was reversed between 2022 and 2023, with a decrease of 3.15 percentage points. The most significant decline occurred between 2023 and 2024, representing a drop of 2.46 percentage points. Finally, a substantial increase of 4.06 percentage points is seen from 2024 to 2025.
- ROA Levels
- The highest ROA value was recorded in 2022 at 10.06%, while the lowest value was observed in 2024 at 4.45%. The 2025 ROA of 8.51% represents a partial recovery towards the levels seen in the earlier years of the period, but remains below the 2021 and 2022 figures.
The considerable volatility in ROA suggests potential underlying factors impacting profitability relative to total assets. Further investigation into the components of asset turnover and profit margin would be necessary to understand the drivers behind these fluctuations.