Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Apple Inc., profitability ratios
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
The financial performance indicators exhibit several notable trends over the analyzed periods.
- Gross Profit Margin
- The gross profit margin shows a consistent upward trend, increasing from 37.82% in 2019 to 46.21% in 2024. This indicates an improvement in the company's ability to generate profit from sales after accounting for the cost of goods sold, reflecting better cost management or pricing strategies over the years.
- Operating Profit Margin
- The operating profit margin remains relatively stable with slight fluctuations but shows an overall increase from 24.57% in 2019 to 31.51% in 2024. Notably, there is a marked improvement starting in 2021, reaching over 30% in 2022 and 2024, suggesting enhanced operational efficiency or favorable operating leverage.
- Net Profit Margin
- Net profit margin experiences some variability, rising significantly from 21.24% in 2019 to 25.88% in 2021, then stabilizing around 25.31% in 2022 and 2023 before slightly decreasing to 23.97% in 2024. This pattern may imply fluctuations in non-operating expenses, taxes, or other income components impacting the bottom line despite stable operational performance.
- Return on Equity (ROE)
- ROE shows a pronounced and highly positive trend, escalating from 61.06% in 2019 to a peak of 196.96% in 2022. Though it declines somewhat afterward, it remains elevated at 164.59% in 2024. This reflects strong profitability relative to shareholder equity, indicating efficient use of invested capital and possibly effects from financial leverage. The volatility suggests dynamic shifts in equity base or net income.
- Return on Assets (ROA)
- ROA demonstrates a significant increase from 16.32% in 2019, peaking at 28.29% in 2022, and then marginally declining to 25.68% by 2024. This indicates enhanced efficiency in asset utilization to generate profits, albeit with minor recent declines possibly due to asset base growth or changes in net income.
Overall, the data reveals a pattern of gradually improving profitability and efficiency across multiple performance metrics, with particularly strong gains in margins and returns until around 2022, followed by slight normalization or stabilization in subsequent years. The elevated returns on equity and assets suggest effective capital deployment, though some recent fluctuations warrant monitoring to understand underlying causes.
Return on Sales
Return on Investment
Gross Profit Margin
Apple Inc., gross profit margin calculation, comparison to benchmarks
| Sep 28, 2024 | Sep 30, 2023 | Sep 24, 2022 | Sep 25, 2021 | Sep 26, 2020 | Sep 28, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Gross margin | 180,683) | 169,148) | 170,782) | 152,836) | 104,956) | 98,392) | |
| Net sales | 391,035) | 383,285) | 394,328) | 365,817) | 274,515) | 260,174) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 46.21% | 44.13% | 43.31% | 41.78% | 38.23% | 37.82% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Arista Networks Inc. | 64.13% | 61.95% | 61.07% | 63.80% | 63.94% | — | |
| Cisco Systems Inc. | 64.73% | 62.73% | 62.55% | 64.02% | 64.26% | 62.94% | |
| Dell Technologies Inc. | 23.60% | 22.18% | 21.63% | 31.22% | 31.40% | — | |
| Super Micro Computer Inc. | 13.75% | 18.01% | 15.40% | 15.03% | 15.76% | 14.16% | |
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
1 2024 Calculation
Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × 180,683 ÷ 391,035 = 46.21%
2 Click competitor name to see calculations.
- Net Sales
- Net sales have shown a consistent upward trend over the period analyzed. Starting at approximately $260 billion in 2019, net sales increased to around $391 billion in 2024. There was a notable jump between 2020 and 2021, where sales grew by roughly 33%. Although the figures indicate a slight dip in 2023 compared to 2022, the overall trajectory remains positive, ending at a higher value in 2024 than in previous years.
- Gross Margin
- Gross margin has also risen steadily, moving from about $98 billion in 2019 to approximately $181 billion in 2024. This growth is consistent with the increase in net sales, indicating an expanding scale of operations. The gradual increase year over year suggests effective cost management and potentially enhanced pricing power or product mix improvements.
- Gross Profit Margin Percentage
- The gross profit margin percentage demonstrates an improving profitability profile. Starting at 37.82% in 2019, the margin increased to 46.21% by 2024. This steady rise indicates enhanced efficiency in generating profit from sales, with the most notable improvements occurring between 2020 and 2024. The trend points to an increasingly favorable balance between cost of goods sold and revenue.
Operating Profit Margin
Apple Inc., operating profit margin calculation, comparison to benchmarks
| Sep 28, 2024 | Sep 30, 2023 | Sep 24, 2022 | Sep 25, 2021 | Sep 26, 2020 | Sep 28, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Operating income | 123,216) | 114,301) | 119,437) | 108,949) | 66,288) | 63,930) | |
| Net sales | 391,035) | 383,285) | 394,328) | 365,817) | 274,515) | 260,174) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 31.51% | 29.82% | 30.29% | 29.78% | 24.15% | 24.57% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Arista Networks Inc. | 42.05% | 38.52% | 34.86% | 31.37% | 30.19% | — | |
| Cisco Systems Inc. | 22.64% | 26.37% | 27.09% | 25.76% | 27.63% | 27.39% | |
| Dell Technologies Inc. | 5.89% | 5.64% | 4.60% | 5.46% | 2.85% | — | |
| Super Micro Computer Inc. | 8.08% | 10.68% | 6.45% | 3.48% | 2.57% | 2.78% | |
| Operating Profit Margin, Sector | |||||||
| Technology Hardware & Equipment | 26.07% | 24.86% | 25.14% | 24.78% | 19.76% | — | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | 26.60% | 24.47% | 26.42% | 26.71% | 22.69% | — | |
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
1 2024 Calculation
Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × 123,216 ÷ 391,035 = 31.51%
2 Click competitor name to see calculations.
- Operating Income
- The operating income showed a consistent upward trend over the six-year period. Starting at $63,930 million in 2019, it increased marginally in 2020 to $66,288 million. A significant jump occurred in 2021, reaching $108,949 million, followed by a continued rise to $119,437 million in 2022. A slight decline was observed in 2023 to $114,301 million, but it recovered in 2024 to a new peak of $123,216 million.
- Net Sales
- Net sales also displayed a strong growth trajectory. From $260,174 million in 2019, there was a steady increase each year until 2022 when net sales peaked at $394,328 million. A small decrease occurred in 2023 to $383,285 million, but sales rebounded in 2024 to $391,035 million, nearing the previous high.
- Operating Profit Margin
- The operating profit margin demonstrated an overall improvement. It started at 24.57% in 2019 and slightly decreased to 24.15% in 2020. Afterwards, it rose substantially to 29.78% in 2021 and continued its increase to 30.29% in 2022. A minor dip to 29.82% was seen in 2023, followed by a recovery to the highest margin of 31.51% in 2024. This indicates enhanced operational efficiency or cost management relative to net sales over time.
- Summary
- The analyzed data indicates robust financial performance with increasing operating income and net sales, except for minor fluctuations in 2023. The rising operating profit margin suggests improved profitability and effective cost control measures. The minor dips in 2023 could warrant further investigation to understand underlying causes. Overall, the trends portray a company strengthening its revenue base and operational profitability through the period observed.
Net Profit Margin
Apple Inc., net profit margin calculation, comparison to benchmarks
| Sep 28, 2024 | Sep 30, 2023 | Sep 24, 2022 | Sep 25, 2021 | Sep 26, 2020 | Sep 28, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 93,736) | 96,995) | 99,803) | 94,680) | 57,411) | 55,256) | |
| Net sales | 391,035) | 383,285) | 394,328) | 365,817) | 274,515) | 260,174) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 23.97% | 25.31% | 25.31% | 25.88% | 20.91% | 21.24% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Arista Networks Inc. | 40.73% | 35.62% | 30.87% | 28.52% | 27.38% | — | |
| Cisco Systems Inc. | 19.18% | 22.13% | 22.91% | 21.26% | 22.75% | 22.39% | |
| Dell Technologies Inc. | 3.63% | 2.39% | 5.50% | 3.45% | 5.01% | — | |
| Super Micro Computer Inc. | 7.69% | 8.98% | 5.49% | 3.14% | 2.52% | 2.05% | |
| Net Profit Margin, Sector | |||||||
| Technology Hardware & Equipment | 20.04% | 20.66% | 21.34% | 21.20% | 17.54% | — | |
| Net Profit Margin, Industry | |||||||
| Information Technology | 20.72% | 20.39% | 22.45% | 23.61% | 19.67% | — | |
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Net sales
= 100 × 93,736 ÷ 391,035 = 23.97%
2 Click competitor name to see calculations.
- Net Income
- The net income exhibited an overall upward trend from 2019 through 2022, increasing from 55,256 million US dollars in 2019 to a peak of 99,803 million US dollars in 2022. However, subsequent years showed a decline, with net income decreasing to 96,995 million in 2023 and further to 93,736 million in 2024. This indicates a period of strong earnings growth followed by a moderate reduction over the most recent two years.
- Net Sales
- Net sales consistently increased between 2019 and 2022, rising from 260,174 million US dollars to 394,328 million US dollars. In 2023, net sales experienced a slight decline to 383,285 million, but showed recovery in 2024, reaching 391,035 million. The general trend reflects sustained revenue growth with a slight dip and partial rebound in the latest periods.
- Net Profit Margin
- The net profit margin percentage showed a decline from 21.24% in 2019 to 20.91% in 2020, then improved significantly in 2021 to 25.88%. This elevated level was largely maintained in 2022 and 2023 at approximately 25.31%. In 2024, the margin contracted to 23.97%, remaining relatively strong but indicating increased cost pressures or reduced operational efficiency compared to the previous two years.
- Summary
- The data reveals a notable pattern of robust growth in both net sales and net income through 2022, accompanied by improved profit margins. After peaking, both net income and profit margins have experienced declines in the most recent two years, despite net sales showing some recovery. This suggests that while revenue generation remains substantial, profitability has been somewhat challenged, possibly due to rising costs or other financial factors impacting the company's efficiency and earnings quality.
Return on Equity (ROE)
Apple Inc., ROE calculation, comparison to benchmarks
| Sep 28, 2024 | Sep 30, 2023 | Sep 24, 2022 | Sep 25, 2021 | Sep 26, 2020 | Sep 28, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 93,736) | 96,995) | 99,803) | 94,680) | 57,411) | 55,256) | |
| Shareholders’ equity | 56,950) | 62,146) | 50,672) | 63,090) | 65,339) | 90,488) | |
| Profitability Ratio | |||||||
| ROE1 | 164.59% | 156.08% | 196.96% | 150.07% | 87.87% | 61.06% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Arista Networks Inc. | 28.54% | 28.91% | 27.68% | 21.13% | 19.11% | — | |
| Cisco Systems Inc. | 22.70% | 28.44% | 29.70% | 25.66% | 29.57% | 34.62% | |
| Dell Technologies Inc. | — | — | — | 131.10% | — | — | |
| Super Micro Computer Inc. | 21.28% | 32.45% | 20.00% | 10.20% | 7.91% | 7.64% | |
| ROE, Sector | |||||||
| Technology Hardware & Equipment | 96.41% | 101.96% | 124.98% | 97.82% | 69.73% | — | |
| ROE, Industry | |||||||
| Information Technology | 29.38% | 31.90% | 39.03% | 42.37% | 35.70% | — | |
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
1 2024 Calculation
ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 93,736 ÷ 56,950 = 164.59%
2 Click competitor name to see calculations.
- Net Income
- The net income exhibited an overall increasing trend from 2019 to 2022, rising from approximately $55.3 billion to about $99.8 billion. However, after peaking in 2022, there was a noticeable decline in the subsequent two years, with values decreasing to approximately $94.0 billion by 2024.
- Shareholders' Equity
- Shareholders’ equity showed a consistent downward trend from 2019 through 2022, dropping from roughly $90.5 billion to $50.7 billion. In 2023, equity rebounded somewhat to around $62.1 billion but then fell again in 2024 to approximately $56.9 billion. Overall, the equity base contracted significantly over the six-year period.
- Return on Equity (ROE)
- ROE demonstrated a strong upward trajectory over the period, starting at 61.06% in 2019 and increasing sharply to nearly 197.0% in 2022. Although it declined slightly after this peak, ROE remained elevated at above 150% in 2023 and 164.59% in 2024. The substantial rise in ROE, despite the shrinking equity, indicates increasingly efficient utilization of equity to generate net income.
- Summary Insights
- The data reveals that net income growth outpaced equity growth consistently, particularly from 2019 through 2022, contributing to the historic highs in ROE. The decline in shareholders' equity, especially noticeable until 2022, may suggest significant share repurchases or other capital management activities reducing the equity base. Although net income decreased after 2022, it remained relatively high, sustaining the company's strong profitability metrics. The elevated and increasing ROE underscores that profitability, relative to the shareholders' equity, has strengthened markedly, reflecting efficient capital deployment despite the equity contraction.
Return on Assets (ROA)
Apple Inc., ROA calculation, comparison to benchmarks
| Sep 28, 2024 | Sep 30, 2023 | Sep 24, 2022 | Sep 25, 2021 | Sep 26, 2020 | Sep 28, 2019 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Net income | 93,736) | 96,995) | 99,803) | 94,680) | 57,411) | 55,256) | |
| Total assets | 364,980) | 352,583) | 352,755) | 351,002) | 323,888) | 338,516) | |
| Profitability Ratio | |||||||
| ROA1 | 25.68% | 27.51% | 28.29% | 26.97% | 17.73% | 16.32% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Arista Networks Inc. | 20.31% | 20.98% | 19.96% | 14.66% | 13.39% | — | |
| Cisco Systems Inc. | 8.29% | 12.38% | 12.57% | 10.86% | 11.82% | 11.88% | |
| Dell Technologies Inc. | 3.91% | 2.73% | 6.00% | 2.63% | 3.88% | — | |
| Super Micro Computer Inc. | 11.73% | 17.42% | 8.90% | 4.99% | 4.39% | 4.27% | |
| ROA, Sector | |||||||
| Technology Hardware & Equipment | 18.69% | 20.58% | 21.62% | 18.88% | 13.59% | — | |
| ROA, Industry | |||||||
| Information Technology | 11.99% | 12.51% | 14.57% | 14.66% | 11.45% | — | |
Based on: 10-K (reporting date: 2024-09-28), 10-K (reporting date: 2023-09-30), 10-K (reporting date: 2022-09-24), 10-K (reporting date: 2021-09-25), 10-K (reporting date: 2020-09-26), 10-K (reporting date: 2019-09-28).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 93,736 ÷ 364,980 = 25.68%
2 Click competitor name to see calculations.
- Net Income
- Net income exhibited a significant increase from 55,256 million US dollars in 2019 to a peak of 99,803 million US dollars in 2022. Following this peak, there was a slight decline, with net income decreasing to 93,736 million US dollars by 2024. Despite this modest reduction in recent years, the overall trend over the six-year period demonstrates substantial growth.
- Total Assets
- Total assets showed a modest fluctuating pattern. Assets decreased from 338,516 million US dollars in 2019 to a low of 323,888 million in 2020, then steadily increased to 364,980 million US dollars by 2024. This indicates an expansion in asset base, particularly notable from 2021 onwards.
- Return on Assets (ROA)
- The return on assets displayed a rising trend, starting at 16.32% in 2019 and increasing to a peak of 28.29% in 2022. Subsequently, ROA declined slightly to 25.68% in 2024, indicating a decrease in asset efficiency but maintaining relatively high levels compared to the initial years.
- Overall Analysis
- The data reflect positive growth in profitability and asset utilization over the analyzed periods. The peak in net income and ROA around 2022 suggests strong operational performance during that time. While there are minor declines in both net income and ROA after 2022, the figures remain significantly above the early period levels, signifying sustained financial strength. The asset base expansion further supports the capacity for future growth.