Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).

Apple Inc., profitability ratios

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.

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

		Sep 29, 2018	Sep 30, 2017	Sep 24, 2016	Sep 26, 2015	Sep 27, 2014	Sep 28, 2013
	Selected Financial Data (USD $ in millions)
	Gross margin
	Net sales
	Ratio
	Gross profit margin¹
	Benchmarks
	Gross Profit Margin, Competitors
	Applied Materials Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.

2018 Calculations

¹ Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × hidden ÷ hidden = hidden

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.

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

		Sep 29, 2018	Sep 30, 2017	Sep 24, 2016	Sep 26, 2015	Sep 27, 2014	Sep 28, 2013
	Selected Financial Data (USD $ in millions)
	Operating income
	Net sales
	Ratio
	Operating profit margin¹
	Benchmarks
	Operating Profit Margin, Competitors
	Applied Materials Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Operating Profit Margin, Sector
	Technology Hardware & Equipment
	Operating Profit Margin, Industry
	Technology

2018 Calculations

¹ Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × hidden ÷ hidden = hidden

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.

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

		Sep 29, 2018	Sep 30, 2017	Sep 24, 2016	Sep 26, 2015	Sep 27, 2014	Sep 28, 2013
	Selected Financial Data (USD $ in millions)
	Net income
	Net sales
	Ratio
	Net profit margin¹
	Benchmarks
	Net Profit Margin, Competitors
	Applied Materials Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Net Profit Margin, Sector
	Technology Hardware & Equipment
	Net Profit Margin, Industry
	Technology

2018 Calculations

¹ Net profit margin = 100 × Net income ÷ Net sales
= 100 × hidden ÷ hidden = hidden

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.

Apple Inc., ROE calculation, comparison to benchmarks

		Sep 29, 2018	Sep 30, 2017	Sep 24, 2016	Sep 26, 2015	Sep 27, 2014	Sep 28, 2013
	Selected Financial Data (USD $ in millions)
	Net income
	Shareholders’ equity
	Ratio
	ROE¹
	Benchmarks
	ROE, Competitors
	Applied Materials Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	ROE, Sector
	Technology Hardware & Equipment
	ROE, Industry
	Technology

2018 Calculations

¹ ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × hidden ÷ hidden = hidden

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.

Apple Inc., ROA calculation, comparison to benchmarks

		Sep 29, 2018	Sep 30, 2017	Sep 24, 2016	Sep 26, 2015	Sep 27, 2014	Sep 28, 2013
	Selected Financial Data (USD $ in millions)
	Net income
	Total assets
	Ratio
	ROA¹
	Benchmarks
	ROA, Competitors
	Applied Materials Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	HP Inc.
	Intel Corp.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	ROA, Sector
	Technology Hardware & Equipment
	ROA, Industry
	Technology

2018 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × hidden ÷ hidden = hidden

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.

	Apple Inc.	Other companies (not purchased previously)
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

	All companies
Financial Statements
Common-Size Financial Statements
Ratios
Relative Valuation
Discounted Cash Flow (DCF) Valuation
Economic Value Added (EVA)
Long-term Trends
Analysis
Financial Reporting Quality

Apple Inc. (AAPL)

Profitability Analysis