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Profitability Analysis
Difficulty: Beginner
Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).
Ratios (Summary)
Apple Inc., profitability ratios
Based on: 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-27), 10-K (filing date: 2013-10-30).
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Apple Inc.’s gross profit margin deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Apple Inc.’s operating profit margin deteriorated from 2016 to 2017 and from 2017 to 2018. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Apple Inc.’s net profit margin deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Apple Inc.’s ROE improved from 2016 to 2017 and from 2017 to 2018. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Apple Inc.’s ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Gross Profit Margin
Apple Inc., gross profit margin calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-27), 10-K (filing date: 2013-10-30).
2018 Calculations
1 Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Apple Inc.’s gross profit margin deteriorated from 2016 to 2017 and from 2017 to 2018. |
Operating Profit Margin
Apple Inc., operating profit margin calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-27), 10-K (filing date: 2013-10-30).
2018 Calculations
1 Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Apple Inc.’s operating profit margin deteriorated from 2016 to 2017 and from 2017 to 2018. |
Net Profit Margin
Apple Inc., net profit margin calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-27), 10-K (filing date: 2013-10-30).
2018 Calculations
1 Net profit margin = 100 × Net income ÷ Net sales
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Apple Inc.’s net profit margin deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
Return on Equity (ROE)
Apple Inc., ROE calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-27), 10-K (filing date: 2013-10-30).
2018 Calculations
1 ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Apple Inc.’s ROE improved from 2016 to 2017 and from 2017 to 2018. |
Return on Assets (ROA)
Apple Inc., ROA calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-11-05), 10-K (filing date: 2017-11-03), 10-K (filing date: 2016-10-26), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-27), 10-K (filing date: 2013-10-30).
2018 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Apple Inc.’s ROA deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level. |
