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

Profitability Ratios (Summary)
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Equity (ROE)
Return on Assets (ROA)

Applied Materials Inc., profitability ratios

		Oct 27, 2019	Oct 28, 2018	Oct 29, 2017	Oct 30, 2016	Oct 25, 2015	Oct 26, 2014
	Return on Sales
	Gross profit margin
	Operating profit margin
	Net profit margin
	Return on Investment
	Return on equity (ROE)
	Return on assets (ROA)

Based on: 10-K (filing date: 2019-12-13), 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).

Profitability 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 ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Operating profit margin	A profitability ratio calculated as operating income divided by revenue.	Applied Materials Inc.’s operating profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
Net profit margin	An indicator of profitability, calculated as net income divided by revenue.	Applied Materials Inc.’s net profit margin ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Profitability ratio	Description	The company
ROE	A profitability ratio calculated as net income divided by shareholders’ equity.	Applied Materials Inc.’s ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.
ROA	A profitability ratio calculated as net income divided by total assets.	Applied Materials Inc.’s ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Applied Materials Inc., gross profit margin calculation, comparison to benchmarks

		Oct 27, 2019	Oct 28, 2018	Oct 29, 2017	Oct 30, 2016	Oct 25, 2015	Oct 26, 2014
	Selected Financial Data (US$ in millions)
	Gross profit
	Net sales
	Profitability Ratio
	Gross profit margin¹
	Benchmarks
	Gross Profit Margin, Competitors²
	Advanced Micro Devices Inc.
	Analog Devices Inc.
	Apple Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	Intel Corp.
	Lam Research Corp.
	Micron Technology Inc.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.

Based on: 10-K (filing date: 2019-12-13), 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).

¹ 2019 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × ÷ =

² Click competitor name to see calculations.

Profitability 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 ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Applied Materials Inc., operating profit margin calculation, comparison to benchmarks

		Oct 27, 2019	Oct 28, 2018	Oct 29, 2017	Oct 30, 2016	Oct 25, 2015	Oct 26, 2014
	Selected Financial Data (US$ in millions)
	Income from operations
	Net sales
	Profitability Ratio
	Operating profit margin¹
	Benchmarks
	Operating Profit Margin, Competitors²
	Advanced Micro Devices Inc.
	Analog Devices Inc.
	Apple Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	Intel Corp.
	Lam Research Corp.
	Micron Technology Inc.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Operating Profit Margin, Sector
	Technology Hardware & Equipment
	Operating Profit Margin, Industry
	Technology

Based on: 10-K (filing date: 2019-12-13), 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).

¹ 2019 Calculation
Operating profit margin = 100 × Income from operations ÷ Net sales
= 100 × ÷ =

² Click competitor name to see calculations.

Profitability ratio	Description	The company
Operating profit margin	A profitability ratio calculated as operating income divided by revenue.	Applied Materials Inc.’s operating profit margin ratio improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Applied Materials Inc., net profit margin calculation, comparison to benchmarks

		Oct 27, 2019	Oct 28, 2018	Oct 29, 2017	Oct 30, 2016	Oct 25, 2015	Oct 26, 2014
	Selected Financial Data (US$ in millions)
	Net income
	Net sales
	Profitability Ratio
	Net profit margin¹
	Benchmarks
	Net Profit Margin, Competitors²
	Advanced Micro Devices Inc.
	Analog Devices Inc.
	Apple Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	Intel Corp.
	Lam Research Corp.
	Micron Technology Inc.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	Net Profit Margin, Sector
	Technology Hardware & Equipment
	Net Profit Margin, Industry
	Technology

Based on: 10-K (filing date: 2019-12-13), 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).

¹ 2019 Calculation
Net profit margin = 100 × Net income ÷ Net sales
= 100 × ÷ =

² Click competitor name to see calculations.

Profitability 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 ratio deteriorated from 2017 to 2018 and from 2018 to 2019.

Applied Materials Inc., ROE calculation, comparison to benchmarks

		Oct 27, 2019	Oct 28, 2018	Oct 29, 2017	Oct 30, 2016	Oct 25, 2015	Oct 26, 2014
	Selected Financial Data (US$ in millions)
	Net income
	Stockholders’ equity
	Profitability Ratio
	ROE¹
	Benchmarks
	ROE, Competitors²
	Advanced Micro Devices Inc.
	Analog Devices Inc.
	Apple Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	Intel Corp.
	Lam Research Corp.
	Micron Technology Inc.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	ROE, Sector
	Technology Hardware & Equipment
	ROE, Industry
	Technology

Based on: 10-K (filing date: 2019-12-13), 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).

¹ 2019 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =

² Click competitor name to see calculations.

Profitability ratio	Description	The company
ROE	A profitability ratio calculated as net income divided by shareholders’ equity.	Applied Materials Inc.’s ROE improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

Applied Materials Inc., ROA calculation, comparison to benchmarks

		Oct 27, 2019	Oct 28, 2018	Oct 29, 2017	Oct 30, 2016	Oct 25, 2015	Oct 26, 2014
	Selected Financial Data (US$ in millions)
	Net income
	Total assets
	Profitability Ratio
	ROA¹
	Benchmarks
	ROA, Competitors²
	Advanced Micro Devices Inc.
	Analog Devices Inc.
	Apple Inc.
	Broadcom Inc.
	Cisco Systems Inc.
	Intel Corp.
	Lam Research Corp.
	Micron Technology Inc.
	NVIDIA Corp.
	Qualcomm Inc.
	Texas Instruments Inc.
	ROA, Sector
	Technology Hardware & Equipment
	ROA, Industry
	Technology

Based on: 10-K (filing date: 2019-12-13), 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).

¹ 2019 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =

² Click competitor name to see calculations.

Profitability ratio	Description	The company
ROA	A profitability ratio calculated as net income divided by total assets.	Applied Materials Inc.’s ROA improved from 2017 to 2018 but then deteriorated significantly from 2018 to 2019.

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

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

Applied Materials Inc. (NASDAQ:AMAT)

Analysis of Profitability Ratios

Profitability Ratios (Summary)

Gross Profit Margin

Operating Profit Margin

Net Profit Margin

Return on Equity (ROE)

Return on Assets (ROA)