Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Amgen Inc., profitability ratios
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).
- Gross Profit Margin
- The gross profit margin shows a declining trend over the analyzed period. Starting at 74.59% in 2020, it slightly decreased to 73.44% in 2021, then marginally increased to 74.17% in 2022. However, the margin significantly declined thereafter, falling to 68.6% in 2023 and further dropping to 59.85% in 2024, indicating increasing costs of goods sold or pricing pressures.
- Operating Profit Margin
- The operating profit margin experienced fluctuations with a general downward tendency. It began at 37.7% in 2020, decreased to 31.44% in 2021, rebounded to 38.57% in 2022, yet subsequently declined sharply to 29.35% in 2023 and further to 22.66% by 2024. This volatility suggests variability in operating efficiency or expense control over time.
- Net Profit Margin
- The net profit margin decreased from 29.97% in 2020 to 24.25% in 2021, slightly improved to 26.42% in 2022, but then declined again to 24.96% in 2023 and dropped substantially to 12.77% in 2024. This indicates a weakening in overall profitability, potentially influenced by higher expenses, taxes, or other non-operating costs in the later years.
- Return on Equity (ROE)
- The return on equity showed a marked upward spike in 2022, reaching an exceptional 178.97% from 77.2% in 2020 and 87.96% in 2021. Despite decreasing in subsequent years to 107.78% in 2023 and 69.59% in 2024, ROE remained significantly elevated compared to the start of the period, reflecting strong returns to shareholders possibly driven by high net income relative to equity or financial leverage.
- Return on Assets (ROA)
- The return on assets declined consistently over the period examined. Starting at 11.54% in 2020, it dropped to 9.63% in 2021, slightly increased to 10.06% in 2022, then decreased significantly to 6.91% in 2023 and further to 4.45% in 2024. This trend indicates diminishing asset utilization efficiency in generating earnings.
Return on Sales
Return on Investment
Gross Profit Margin
Amgen Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit from product sales | 19,168) | 18,459) | 18,395) | 17,843) | 18,081) | |
| Product sales | 32,026) | 26,910) | 24,801) | 24,297) | 24,240) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 59.85% | 68.60% | 74.17% | 73.44% | 74.59% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 69.99% | 62.42% | 70.00% | 68.96% | 66.41% | |
| Bristol-Myers Squibb Co. | 71.08% | 76.24% | 78.04% | 78.57% | 72.31% | |
| Danaher Corp. | 59.50% | 58.74% | 60.21% | 60.95% | 55.98% | |
| Eli Lilly & Co. | 81.31% | 79.25% | 76.77% | 74.18% | 77.66% | |
| Gilead Sciences Inc. | 78.15% | 75.87% | 79.03% | 75.56% | 81.23% | |
| Johnson & Johnson | 69.07% | 68.82% | 67.26% | 68.16% | 65.58% | |
| Merck & Co. Inc. | 76.32% | 73.17% | 70.63% | 72.02% | 67.74% | |
| Pfizer Inc. | 71.94% | 58.10% | 66.05% | 62.48% | 79.63% | |
| Regeneron Pharmaceuticals Inc. | 86.13% | 86.16% | 87.18% | 84.83% | 86.82% | |
| Thermo Fisher Scientific Inc. | 41.28% | 39.90% | 42.24% | 50.08% | 49.67% | |
| Vertex Pharmaceuticals Inc. | 86.11% | 87.21% | 87.90% | 88.06% | 88.14% | |
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).
1 2024 Calculation
Gross profit margin = 100 × Gross profit from product sales ÷ Product sales
= 100 × 19,168 ÷ 32,026 = 59.85%
2 Click competitor name to see calculations.
- Product Sales
- Product sales exhibit a consistent upward trend throughout the observed period. Starting at 24,240 million US dollars in 2020, sales increased marginally to 24,297 million in 2021. This growth accelerated in subsequent years, reaching 24,801 million in 2022, 26,910 million in 2023, and peaking at 32,026 million in 2024. The data suggests a strengthening sales performance over time, with the most significant increase occurring between 2023 and 2024.
- Gross Profit from Product Sales
- Gross profit from product sales remained relatively stable during the initial years. In 2020, gross profit was 18,081 million US dollars, slightly declining to 17,843 million in 2021. It then increased to 18,395 million in 2022 and remained nearly unchanged at 18,459 million in 2023, before rising again to 19,168 million in 2024. Despite the growth in product sales, gross profit exhibited only modest increases, suggesting pressure on cost management or pricing strategy.
- Gross Profit Margin
- The gross profit margin showed a declining trend over the five-year period. The margin started at 74.59% in 2020, followed by a small drop to 73.44% in 2021. It slightly recovered to 74.17% in 2022 but then experienced a notable decrease to 68.6% in 2023. This downward trend accelerated in 2024, with the margin falling further to 59.85%. This decline indicates that while product sales increased, the cost of goods sold grew at a faster rate, reducing profitability on sales.
- Overall Analysis
- While product sales grew substantially, especially in the later years, gross profit and gross profit margin did not follow the same positive trajectory. The observed decline in gross profit margin despite increasing sales points to rising costs or pricing challenges that impacted profitability. The company's capacity to increase revenue was not matched by a proportional improvement in earnings efficiency, highlighting potential areas for operational or pricing reviews to enhance margins.
Operating Profit Margin
Amgen Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 7,258) | 7,897) | 9,566) | 7,639) | 9,139) | |
| Product sales | 32,026) | 26,910) | 24,801) | 24,297) | 24,240) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 22.66% | 29.35% | 38.57% | 31.44% | 37.70% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 16.22% | 23.49% | 31.21% | 31.89% | 24.81% | |
| Bristol-Myers Squibb Co. | -15.50% | 16.18% | 17.96% | 15.91% | -21.60% | |
| Danaher Corp. | 20.37% | 21.77% | 27.61% | 25.35% | 18.99% | |
| Eli Lilly & Co. | 28.64% | 18.92% | 24.97% | 22.45% | 24.69% | |
| Gilead Sciences Inc. | 5.81% | 28.24% | 27.17% | 36.72% | 16.72% | |
| Johnson & Johnson | 23.42% | 24.90% | 24.63% | 24.95% | 23.60% | |
| Merck & Co. Inc. | 31.03% | 3.92% | 30.27% | 25.74% | 16.47% | |
| Pfizer Inc. | 19.51% | 2.15% | 35.37% | 24.70% | 20.92% | |
| Regeneron Pharmaceuticals Inc. | 28.10% | 30.85% | 38.93% | 55.67% | 42.09% | |
| Thermo Fisher Scientific Inc. | 17.11% | 16.00% | 18.69% | 25.57% | 24.19% | |
| Vertex Pharmaceuticals Inc. | -2.11% | 38.83% | 48.23% | 36.73% | 46.03% | |
| Operating Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 17.84% | 18.01% | 28.59% | 26.98% | 18.87% | |
| Operating Profit Margin, Industry | ||||||
| Health Care | 10.05% | 10.60% | 15.03% | 14.99% | 11.62% | |
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).
1 2024 Calculation
Operating profit margin = 100 × Operating income ÷ Product sales
= 100 × 7,258 ÷ 32,026 = 22.66%
2 Click competitor name to see calculations.
The financial data presents several key performance indicators over a five-year period, enabling an analysis of trends and financial health.
- Operating Income
- The operating income experienced fluctuation between 2020 and 2024. Starting at 9,139 million US dollars in 2020, it declined significantly to 7,639 million in 2021. It then rebounded to 9,566 million in 2022 but decreased again in subsequent years to 7,897 million in 2023 and further to 7,258 million in 2024. Overall, the operating income shows variability with a downward trend in the last two recorded years.
- Product Sales
- Product sales have demonstrated a consistent upward trajectory over the period. From 24,240 million US dollars in 2020, sales increased marginally to 24,297 million in 2021 and continued rising to 24,801 million in 2022. Growth accelerated in 2023 and 2024, with product sales reaching 26,910 million and then 32,026 million respectively. This indicates steady and accelerating revenue growth from product sales over the five years.
- Operating Profit Margin
- The operating profit margin shows a declining trend. Beginning at 37.7% in 2020, the margin decreased to 31.44% in 2021, then slightly recovered to 38.57% in 2022. However, it dropped again significantly in the following years to 29.35% in 2023 and further to 22.66% in 2024. This reduction in margin suggests decreased operational efficiency or increased costs relative to sales despite growing product sales.
In summary, while the company has succeeded in increasing product sales consistently, the operating income and particularly the operating profit margin have shown weakening performance by the end of the analyzed period. This disconnect between sales growth and profitability margins may warrant further investigation into cost management, pricing strategies, or other operational factors impacting profitability.
Net Profit Margin
Amgen Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 4,090) | 6,717) | 6,552) | 5,893) | 7,264) | |
| Product sales | 32,026) | 26,910) | 24,801) | 24,297) | 24,240) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 12.77% | 24.96% | 26.42% | 24.25% | 29.97% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | 7.59% | 8.95% | 20.39% | 20.54% | 10.08% | |
| Bristol-Myers Squibb Co. | -18.53% | 17.83% | 13.71% | 15.08% | -21.20% | |
| Danaher Corp. | 16.33% | 19.94% | 22.91% | 21.84% | 16.36% | |
| Eli Lilly & Co. | 23.51% | 15.36% | 21.88% | 19.71% | 25.24% | |
| Gilead Sciences Inc. | 1.68% | 21.03% | 17.02% | 23.05% | 0.51% | |
| Johnson & Johnson | 15.84% | 41.28% | 18.90% | 22.26% | 17.82% | |
| Merck & Co. Inc. | 26.68% | 0.61% | 24.49% | 26.79% | 14.72% | |
| Pfizer Inc. | 12.62% | 3.56% | 31.01% | 26.76% | 22.53% | |
| Regeneron Pharmaceuticals Inc. | 31.07% | 30.14% | 35.64% | 50.25% | 41.35% | |
| Thermo Fisher Scientific Inc. | 14.77% | 13.99% | 15.47% | 19.70% | 19.79% | |
| Vertex Pharmaceuticals Inc. | -4.86% | 36.68% | 37.20% | 30.92% | 43.70% | |
| Net Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 12.30% | 17.95% | 22.55% | 23.38% | 14.07% | |
| Net Profit Margin, Industry | ||||||
| Health Care | 7.02% | 9.24% | 11.62% | 12.42% | 8.45% | |
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).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Product sales
= 100 × 4,090 ÷ 32,026 = 12.77%
2 Click competitor name to see calculations.
The financial data reveals several key trends over the five-year period from 2020 to 2024. Product sales have shown a consistent upward trajectory, increasing from 24,240 million US dollars in 2020 to 32,026 million US dollars in 2024. This demonstrates a steady growth in revenue generation for the company.
In contrast, net income has exhibited a more volatile pattern. While it initially declined from 7,264 million US dollars in 2020 to 5,893 million US dollars in 2021, it rebounded in the subsequent years, reaching 6,717 million US dollars in 2023 before experiencing a significant decline to 4,090 million US dollars in 2024. This suggests fluctuations in profitability despite growing sales.
The net profit margin percentage aligns with the net income trend and indicates profitability efficiency relative to sales. Margins decreased notably from 29.97% in 2020 to 24.25% in 2021, slightly recovering to around 25% in 2022 and 2023, before dropping sharply to 12.77% in 2024. The sharp decline in margin during the last reported year may indicate increased costs, pricing pressures, or other factors adversely impacting earnings relative to sales.
- Product Sales
- Consistent growth over the five years, with an increase of approximately 32% from 2020 to 2024.
- Net Income
- Experienced a decline in 2021, partial recovery by 2023, followed by a sharp decrease in 2024, ending lower than at the beginning of the period.
- Net Profit Margin
- Declined from nearly 30% in 2020 to less than 13% by 2024, reflecting reduced profitability relative to sales despite revenue growth.
Overall, while top-line sales growth is positive, the decline in net income and net profit margin in 2024 signals potential challenges in cost management or external pressures affecting net profitability. Further investigation into expense trends and market conditions would be advisable to understand the drivers behind the declining profit margins in the final period.
Return on Equity (ROE)
Amgen Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 4,090) | 6,717) | 6,552) | 5,893) | 7,264) | |
| Stockholders’ equity | 5,877) | 6,232) | 3,661) | 6,700) | 9,409) | |
| Profitability Ratio | ||||||
| ROE1 | 69.59% | 107.78% | 178.97% | 87.96% | 77.20% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| AbbVie Inc. | 128.66% | 46.94% | 68.60% | 74.91% | 35.30% | |
| Bristol-Myers Squibb Co. | -54.78% | 27.27% | 20.37% | 19.46% | -23.84% | |
| Danaher Corp. | 7.87% | 8.91% | 14.39% | 14.24% | 9.17% | |
| Eli Lilly & Co. | 74.62% | 48.65% | 58.64% | 62.16% | 109.79% | |
| Gilead Sciences Inc. | 2.48% | 24.81% | 21.62% | 29.55% | 0.68% | |
| Johnson & Johnson | 19.68% | 51.11% | 23.36% | 28.20% | 23.25% | |
| Merck & Co. Inc. | 36.96% | 0.97% | 31.57% | 34.17% | 27.91% | |
| Pfizer Inc. | 9.11% | 2.38% | 32.79% | 28.47% | 15.21% | |
| Regeneron Pharmaceuticals Inc. | 15.03% | 15.22% | 19.14% | 43.03% | 31.86% | |
| Thermo Fisher Scientific Inc. | 12.78% | 12.83% | 15.80% | 18.94% | 18.47% | |
| Vertex Pharmaceuticals Inc. | -3.26% | 20.59% | 23.88% | 23.19% | 31.22% | |
| ROE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 15.57% | 20.65% | 27.99% | 29.75% | 17.22% | |
| ROE, Industry | ||||||
| Health Care | 14.75% | 18.50% | 22.94% | 23.78% | 15.95% | |
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).
1 2024 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 4,090 ÷ 5,877 = 69.59%
2 Click competitor name to see calculations.
- Net Income
- The net income demonstrates a fluctuating trend over the five-year period. It decreased notably from 7,264 million USD in 2020 to 5,893 million USD in 2021, followed by a recovery to 6,552 million USD in 2022 and a slight increase to 6,717 million USD in 2023. However, in 2024, there is a significant decline to 4,090 million USD, which represents the lowest figure within the observed period.
- Stockholders’ Equity
- Stockholders’ equity shows a declining pattern overall, with some variability. The equity value started at 9,409 million USD in 2020 and experienced a sharp drop to 6,700 million USD in 2021. A further steep decrease was observed in 2022, reaching 3,661 million USD. This was followed by a recovery in 2023, increasing to 6,232 million USD, and a slight decrease to 5,877 million USD in 2024. The substantial reduction over the period suggests significant variations in retained earnings, issuance, or buyback of shares.
- Return on Equity (ROE)
- ROE shows considerable volatility with an overall high level, indicating fluctuating profitability relative to equity. It started at 77.2% in 2020 and increased sharply to 87.96% in 2021. In 2022, ROE peaked dramatically at 178.97%, reflecting either exceptionally high net income relative to equity or very low equity levels. It declined to 107.78% in 2023 and further decreased to 69.59% in 2024, still remaining at an elevated level compared to 2020. The high ROE values correlate with the substantial decreases and recoveries in stockholders' equity, suggesting that changes in equity have a strong influence on profitability ratios.
- Overall Analysis
- The financial data reveals a company experiencing significant changes in both profitability and equity structure over the observed period. Net income shows fluctuation with a downward trend in the latest year, while stockholders’ equity has considerably decreased overall despite some recovery phases. The elevated and volatile ROE figures emphasize the impact of these equity fluctuations on return measurements, pointing to potentially higher financial leverage or changes in capital structure. The trends suggest that the company may be undergoing strategic financial adjustments, which have implications for sustainability and risk profile.
Return on Assets (ROA)
Amgen Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 4,090) | 6,717) | 6,552) | 5,893) | 7,264) | |
| Total assets | 91,839) | 97,154) | 65,121) | 61,165) | 62,948) | |
| Profitability Ratio | ||||||
| ROA1 | 4.45% | 6.91% | 10.06% | 9.63% | 11.54% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| AbbVie Inc. | 3.17% | 3.61% | 8.53% | 7.88% | 3.07% | |
| Bristol-Myers Squibb Co. | -9.66% | 8.43% | 6.53% | 6.40% | -7.61% | |
| Danaher Corp. | 5.03% | 5.64% | 8.55% | 7.73% | 4.79% | |
| Eli Lilly & Co. | 13.45% | 8.19% | 12.62% | 11.44% | 13.28% | |
| Gilead Sciences Inc. | 0.81% | 9.12% | 7.27% | 9.16% | 0.18% | |
| Johnson & Johnson | 7.81% | 20.98% | 9.57% | 11.47% | 8.41% | |
| Merck & Co. Inc. | 14.62% | 0.34% | 13.30% | 12.35% | 7.72% | |
| Pfizer Inc. | 3.76% | 0.94% | 15.91% | 12.11% | 6.23% | |
| Regeneron Pharmaceuticals Inc. | 11.69% | 11.95% | 14.85% | 31.75% | 20.47% | |
| Thermo Fisher Scientific Inc. | 6.51% | 6.07% | 7.15% | 8.12% | 9.23% | |
| Vertex Pharmaceuticals Inc. | -2.38% | 15.92% | 18.30% | 17.44% | 23.07% | |
| ROA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 5.30% | 7.25% | 10.67% | 10.42% | 5.45% | |
| ROA, Industry | ||||||
| Health Care | 5.25% | 6.71% | 8.71% | 8.70% | 5.45% | |
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).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 4,090 ÷ 91,839 = 4.45%
2 Click competitor name to see calculations.
- Net Income
- The net income experienced a fluctuation over the observed period. It started at 7,264 million USD in 2020 and declined to 5,893 million USD in 2021. Subsequently, there was a recovery to 6,552 million USD in 2022 and a slight increase to 6,717 million USD in 2023. However, in 2024, net income dropped significantly to 4,090 million USD, representing a substantial decrease compared to previous years.
- Total Assets
- Total assets showed an overall upward trend during the period. Beginning at 62,948 million USD in 2020, there was a modest decrease to 61,165 million USD in 2021. From 2021 onwards, assets increased to 65,121 million USD in 2022, followed by a sharp rise to 97,154 million USD in 2023. In 2024, total assets decreased slightly to 91,839 million USD but remained significantly higher than in earlier years.
- Return on Assets (ROA)
- ROA indicates a declining trend across the timeframe. Starting from 11.54% in 2020, it decreased to 9.63% in 2021 and showed a slight improvement to 10.06% in 2022. Nonetheless, it then declined sharply to 6.91% in 2023 and further down to 4.45% in 2024. This decline suggests decreasing efficiency in generating profit from the company’s asset base despite the growth in total assets.