.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
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Return on Sales | |||||||
| | Gross profit margin | % | % | % | % | % | % |
| | Operating profit margin | % | % | % | % | % | % |
| | Net profit margin | % | % | % | % | % | % |
| Return on Investment | |||||||
| | Return on equity (ROE) | % | % | % | % | % | % |
| | Return on assets (ROA) | % | % | % | % | % | % |
Source: Based on data from Applied Materials Inc. Annual Reports
| 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 2015 to 2016 and from 2016 to 2017. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Applied Materials Inc.'s operating profit margin improved from 2015 to 2016 and from 2016 to 2017. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Applied Materials Inc.'s net profit margin improved from 2015 to 2016 and from 2016 to 2017. |
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Applied Materials Inc.'s ROE improved from 2015 to 2016 and from 2016 to 2017. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Applied Materials Inc.'s ROA improved from 2015 to 2016 and from 2016 to 2017. |
Gross Profit Margin
Applied Materials Inc., gross profit margin calculation
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Gross profit | ||||||
| | Net sales | ||||||
| Ratio | |||||||
| | Gross profit margin1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors | |||||||
| Apple Inc. | % | % | % | % | % | % | |
| Broadcom Inc. | % | % | % | % | % | % | |
| Cisco Systems Inc. | % | % | % | % | % | % | |
| HP Inc. | % | % | % | % | % | % | |
| Intel Corp. | % | % | % | % | % | % | |
| NVIDIA Corp. | % | % | % | % | % | % | |
| Qualcomm Inc. | % | % | % | % | % | % | |
| Texas Instruments Inc. | % | % | % | % | % | % | |
Source: Based on data from Applied Materials Inc. Annual Reports
2017 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 2015 to 2016 and from 2016 to 2017. |
Operating Profit Margin
Applied Materials Inc., operating profit margin calculation, comparison to benchmarks
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Income from operations | ||||||
| | Net sales | ||||||
| Ratio | |||||||
| | Operating profit margin1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors | |||||||
| Apple 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 | % | % | % | % | % | % | |
Source: Based on data from Applied Materials Inc. Annual Reports
2017 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 2015 to 2016 and from 2016 to 2017. |
Net Profit Margin
Applied Materials Inc., net profit margin calculation, comparison to benchmarks
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Net income | ||||||
| | Net sales | ||||||
| Ratio | |||||||
| | Net profit margin1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| Net Profit Margin, Competitors | |||||||
| Apple 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 | % | % | % | % | % | % | |
Source: Based on data from Applied Materials Inc. Annual Reports
2017 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 2015 to 2016 and from 2016 to 2017. |
Return on Equity (ROE)
Applied Materials Inc., ROE calculation, comparison to benchmarks
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Net income | ||||||
| | Stockholders’ equity | ||||||
| Ratio | |||||||
| | ROE1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| ROE, Competitors | |||||||
| Apple 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 | % | % | % | % | % | % | |
Source: Based on data from Applied Materials Inc. Annual Reports
2017 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 2015 to 2016 and from 2016 to 2017. |
Return on Assets (ROA)
Applied Materials Inc., ROA calculation, comparison to benchmarks
| Oct 29, 2017 | Oct 30, 2016 | Oct 25, 2015 | Oct 26, 2014 | Oct 27, 2013 | Oct 28, 2012 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | |||||||
| | Net income | ||||||
| | Total assets | ||||||
| Ratio | |||||||
| | ROA1 | % | % | % | % | % | % |
| Benchmarks | |||||||
| ROA, Competitors | |||||||
| Apple 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 | % | % | % | % | % | % | |
Source: Based on data from Applied Materials Inc. Annual Reports
2017 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 2015 to 2016 and from 2016 to 2017. |
