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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)
Applied Materials Inc., profitability ratios
Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17), 10-K (filing date: 2013-12-04).
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Applied Materials Inc.’s gross profit margin improved from 2016 to 2017 and from 2017 to 2018. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Applied Materials Inc.’s operating profit margin improved from 2016 to 2017 and from 2017 to 2018. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Applied Materials Inc.’s net profit margin improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level. |
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Applied Materials 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. | Applied Materials Inc.’s ROA improved from 2016 to 2017 and from 2017 to 2018. |
Gross Profit Margin
Applied Materials Inc., gross profit margin calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17), 10-K (filing date: 2013-12-04).
2018 Calculations
1 Gross profit margin = 100 × Gross profit ÷ 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. | Applied Materials Inc.’s gross profit margin improved from 2016 to 2017 and from 2017 to 2018. |
Operating Profit Margin
Applied Materials Inc., operating profit margin calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17), 10-K (filing date: 2013-12-04).
2018 Calculations
1 Operating profit margin = 100 × Income from operations ÷ Net sales
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Applied Materials Inc.’s operating profit margin improved from 2016 to 2017 and from 2017 to 2018. |
Net Profit Margin
Applied Materials Inc., net profit margin calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17), 10-K (filing date: 2013-12-04).
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. | Applied Materials Inc.’s net profit margin improved from 2016 to 2017 but then slightly deteriorated from 2017 to 2018 not reaching 2016 level. |
Return on Equity (ROE)
Applied Materials Inc., ROE calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17), 10-K (filing date: 2013-12-04).
2018 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Applied Materials Inc.’s ROE improved from 2016 to 2017 and from 2017 to 2018. |
Return on Assets (ROA)
Applied Materials Inc., ROA calculation, comparison to benchmarks
Based on: 10-K (filing date: 2018-12-13), 10-K (filing date: 2017-12-15), 10-K (filing date: 2016-12-15), 10-K (filing date: 2015-12-09), 10-K (filing date: 2014-12-17), 10-K (filing date: 2013-12-04).
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. | Applied Materials Inc.’s ROA improved from 2016 to 2017 and from 2017 to 2018. |