Common-Size Income Statement
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Amgen Inc., common-size consolidated income statement
Based on: 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), 10-K (reporting date: 2020-12-31).
The financial data reveal notable shifts in cost structure, profitability, and income components over the five-year period.
- Cost of Sales and Gross Profit
- The cost of sales as a percentage of product sales rose consistently from -25.41% in 2020 to -40.15% in 2024, indicating increasing direct costs relative to revenue. Consequently, gross profit margin declined significantly from 74.59% in 2020 to 59.85% in 2024, showing a decreased efficiency in managing production and procurement expenses.
- Other Revenues
- Other revenues as a percentage of product sales experienced fluctuations but remained relatively stable overall, peaking at 6.92% in 2021 before tapering to 4.37% in 2024, suggesting some variability in non-product income streams.
- Research and Development
- Research and development expenses hovered in a narrow range around -17.36% to -19.83%, reflecting a consistent focus on innovation and product development. An exception is the acquired in-process research and development which was only notably present in 2021 at -6.19%, possibly representing strategic acquisitions that year.
- Selling, General and Administrative Expenses
- These expenses showed a slight downward trend from -23.64% in 2020 to around -22.16% in 2024, indicating moderate control over operating administrative costs relative to sales.
- Other Operating Items
- The line item labeled "Other" demonstrated some volatility: it declined sharply to -3.27% in 2023 but recovered to -0.77% in 2024, implying irregular items or adjustments affecting operating costs.
- Operating Income
- Operating income as a percentage of product sales declined from 37.7% in 2020 to 22.66% in 2024, mirroring the increased cost of sales and the modest control over operating expenses. This reflects reduced core operational profitability over the period.
- Interest Expense and Other Income (Expense), Net
- Interest expense increased significantly from -5.21% in 2020 to around -10% in 2023 and 2024, highlighting higher financing costs or increased debt levels. Other income (expense) was mostly positive but volatile, with a marked positive spike of 10.53% in 2023, followed by normalization to 1.58% in 2024, indicating one-off gains or losses in those years.
- Income Before Taxes and Taxes
- Income before income taxes declined steadily from 33.55% in 2020 to 14.39% in 2024, consistent with the erosion of operating income and increased interest costs. Provision for income taxes decreased overall, dropping from -3.58% in 2020 to -1.62% in 2024, reflecting lower taxable income or more efficient tax management.
- Net Income
- Net income followed a similar downward trend from 29.97% in 2020 to 12.77% in 2024, confirming reduced profitability after all expenses and taxes. The reduction corroborates the pressures seen in cost increases, operating margin compression, and higher financing costs.
Overall, the data indicate increasing cost pressures, notably in cost of sales and interest expenses, which have compressed gross and net margins despite stable investments in R&D and controlled administrative expenses. The company appears to have experienced challenges in maintaining profitability levels over the reported period.