Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2012
- Total Asset Turnover since 2012
- Price to Operating Profit (P/OP) since 2012
- Analysis of Revenues
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Profitability Ratios (Summary)
Meta Platforms Inc., profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Gross Profit Margin
- The gross profit margin exhibits a generally stable and strong performance over the five-year period. Beginning at 80.58% in 2020, it slightly increased to 80.79% in 2021, followed by a minor decline to 78.35% in 2022. The margin then recovered in 2023 to 80.76% and further improved to 81.67% in 2024. Overall, the margin remains above 78%, indicating consistent efficiency in managing production costs relative to revenue.
- Operating Profit Margin
- The operating profit margin experienced notable fluctuations during the period. Starting at 38.01% in 2020, it rose to a peak of 39.65% in 2021. However, a significant drop occurred in 2022, declining to 24.82%, suggesting increased operating expenses or reduced operating income. The margin partially recovered to 34.66% in 2023 and reached its highest point of 42.18% in 2024, indicating improved operational efficiency in the latter years.
- Net Profit Margin
- The net profit margin trend mirrors that of the operating margin with some variance. It started at 33.9% in 2020, slightly declining to 33.38% in 2021. In 2022, a sharp reduction to 19.9% was observed, implying challenges in profitability possibly due to higher costs, taxes, or other non-operating factors. Recovery began in 2023 with a margin of 28.98%, and by 2024, the margin further increased to 37.91%, reflecting stronger bottom-line profitability.
- Return on Equity (ROE)
- Return on equity showed positive but variable trends. Starting from 22.72% in 2020, it peaked at 31.53% in 2021, demonstrating strong profitability and efficient use of shareholder equity. However, the ROE decreased sharply to 18.45% in 2022, aligning with the dip seen in profit margins. Subsequent years saw improvement, with ROE increasing to 25.53% in 2023 and reaching 34.14% in 2024, indicating enhanced returns to shareholders over time.
- Return on Assets (ROA)
- The return on assets followed a pattern similar to ROE, beginning at 18.29% in 2020 and rising to 23.72% in 2021. A decrease to 12.49% occurred in 2022, signaling less effective asset utilization during that period. ROA then improved to 17.03% in 2023 and significantly increased to 22.59% in 2024, reflecting better asset management and profitability trends in recent years.
- Summary
- The financial margins and returns demonstrate robust performance with short-term volatility especially evident in 2022. All key metrics—gross profit margin, operating profit margin, net profit margin, ROE, and ROA—show a decline in 2022 followed by recovery and growth through 2023 and 2024. The recovery to and surpassing of previous peak levels by 2024 suggests effective strategic adjustments leading to improved profitability and operational efficiency. Overall, the company shows resilience and an upward trajectory in financial performance over the analyzed period.
Return on Sales
Return on Investment
Gross Profit Margin
Meta Platforms Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenue Trends
- Revenue has exhibited a steady upward trajectory over the observed period. Starting from approximately 85.97 billion USD in 2020, revenue increased significantly to 117.93 billion USD in 2021. Although there was a marginal decline in 2022 to 116.61 billion USD, revenue resumed growth thereafter, reaching 134.90 billion USD in 2023 and further rising to an estimated 164.50 billion USD in 2024. This pattern indicates sustained business expansion with a brief plateau in 2022.
- Gross Profit and Profitability
- Gross profit mirrored the revenue growth pattern, increasing from 69.27 billion USD in 2020 to 95.28 billion USD in 2021, followed by a slight decrease to 91.36 billion USD in 2022. Subsequently, gross profit continued to rise, reaching 108.94 billion USD in 2023 and an estimated 134.34 billion USD in 2024. The gross profit margin remained relatively stable and strong, fluctuating only marginally between roughly 78% and 82% over the years. The margin was highest in 2024 at 81.67%, indicating an improvement in cost management or product mix.
- Overall Insights
- The financial data show a robust overall growth trend in both revenue and gross profit, pointing to effective growth strategies and operational efficiency. The minor dip in revenue and gross profit in 2022 may be indicative of external market pressures or strategic recalibration but was transient. Maintaining a gross profit margin consistently above 78% demonstrates strong profitability and resilience in core operations. The projected figures for 2024 suggest continued positive momentum heading forward.
Operating Profit Margin
Meta Platforms Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Income from operations | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Operating Profit Margin, Sector | ||||||
| Media & Entertainment | ||||||
| Operating Profit Margin, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several key trends over the five-year period ending December 31, 2024. Revenue has shown consistent growth, increasing from approximately $85.97 billion in 2020 to $164.50 billion in 2024. This upward trajectory indicates expanding business activities and potentially successful market strategies driving sales.
Income from operations fluctuated more noticeably. It rose from $32.67 billion in 2020 to a peak of around $46.75 billion in 2021, then declined significantly to approximately $28.94 billion in 2022. Subsequently, income from operations rebounded, reaching $46.75 billion again in 2023 and further increasing to $69.38 billion by the end of 2024. This pattern suggests periods of both operational challenges and recovery, possibly reflecting variable cost management or one-time items affecting profitability.
The operating profit margin shows a similar pattern with an initial increase from 38.01% in 2020 to 39.65% in 2021, followed by a sharp decline to 24.82% in 2022. However, the margin improved significantly thereafter, rising to 34.66% in 2023 and reaching a new high of 42.18% in 2024. The margin fluctuations imply evolving efficiency in converting revenue into operating profit, with recent years marked by substantial improvement in profitability ratios.
- Revenue
- Demonstrated steady annual growth, nearly doubling over the period analyzed.
- Income from operations
- Experienced significant volatility with a notable dip in 2022 but recovered strongly in subsequent years, ending at a record high.
- Operating profit margin
- Varied considerably, aligning with income from operations trends, signaling changes in cost structure or operational efficiency, culminating in the highest margin in 2024.
Net Profit Margin
Meta Platforms Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| Net Profit Margin, Sector | ||||||
| Media & Entertainment | ||||||
| Net Profit Margin, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net income ÷ Revenue
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data over the five-year period reveals several notable trends in the company's profitability and revenue generation.
- Revenue Trends
- Revenue demonstrated a generally increasing trajectory from 2020 through 2024, starting at approximately 85,965 million US dollars in 2020 and rising to 164,501 million US dollars by 2024. There was a slight dip between 2021 and 2022, where revenue decreased marginally from 117,929 million to 116,609 million, but this was followed by significant growth afterward.
- Net Income Movements
- Net income experienced fluctuations over the period. It increased from 29,146 million US dollars in 2020 to a peak of 39,370 million in 2021, then declined markedly in 2022 to 23,200 million. However, it rebounded in the subsequent years, rising to 39,098 million in 2023 and surging further to 62,360 million in 2024, signaling strong recovery and growth in profitability.
- Net Profit Margin Analysis
- The net profit margin showed variability consistent with net income trends. It started at a high of 33.9% in 2020 and remained relatively stable in 2021 at 33.38%, followed by a notable decrease to 19.9% in 2022. Subsequently, the margin improved to 28.98% in 2023 and reached its highest point over the period at 37.91% in 2024, indicating enhanced efficiency or profitability relative to revenue in the most recent year.
Overall, the data suggests a company undergoing cyclical challenges around 2022 but demonstrating strong recovery through 2023 and 2024, with both revenue and profitability margins achieving new highs by the end of the period analyzed.
Return on Equity (ROE)
Meta Platforms Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| ROE, Sector | ||||||
| Media & Entertainment | ||||||
| ROE, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income experienced a significant increase from 29,146 million US dollars in 2020 to 39,370 million in 2021. However, there was a notable decline in 2022, dropping to 23,200 million. This downturn was followed by a recovery in 2023, reaching 39,098 million, and a substantial rise in 2024 to 62,360 million, indicating overall strong profitability growth by the end of the period.
- Stockholders’ Equity
- Stockholders’ equity showed a slight decline from 128,290 million US dollars in 2020 to 124,879 million in 2021, then stabilized in 2022 with a small increase to 125,713 million. From 2023 onward, equity grew significantly, reaching 153,168 million and further climbing to 182,637 million in 2024, suggesting reinforced financial strength and retained earnings growth.
- Return on Equity (ROE)
- Return on equity increased sharply from 22.72% in 2020 to 31.53% in 2021, followed by a decrease to 18.45% in 2022. ROE recovered in 2023 to 25.53% and further improved markedly to 34.14% in 2024. This trend reflects volatility in profitability efficiency relative to equity, but with a strong upward trajectory in the latter years.
- Overall Trends and Insights
- The data reveals fluctuations in profitability and equity with a temporary downturn in 2022 across net income and ROE. Despite this, there is a clear recovery and growth pattern in 2023 and 2024, with both profitability and equity reaching their highest points by the end of the analyzed period. The improved ROE in 2024 signals enhanced efficiency in generating profit from shareholders' equity, supported by a solid increase in net income and equity base. This pattern indicates an effective utilization of capital and a robust financial performance trajectory in the recent years.
Return on Assets (ROA)
Meta Platforms Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Netflix Inc. | ||||||
| Take-Two Interactive Software Inc. | ||||||
| Walt Disney Co. | ||||||
| ROA, Sector | ||||||
| Media & Entertainment | ||||||
| ROA, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income demonstrates a fluctuating but generally upward trend over the five-year period. Beginning at $29,146 million in 2020, it increased significantly to $39,370 million in 2021. However, there was a notable decline in 2022 to $23,200 million, followed by a recovery in 2023 to $39,098 million. The year 2024 shows a substantial rise to $62,360 million, reaching the highest value in the dataset.
- Total Assets
- Total assets steadily increased throughout the period, starting at $159,316 million in 2020 and rising each year to reach $276,054 million by 2024. This consistent growth suggests ongoing investments and expansion of asset base over time.
- Return on Assets (ROA)
- The Return on Assets ratio indicates variability in profitability relative to assets. It peaked at 23.72% in 2021, dropped to its lowest point of 12.49% in 2022, and then gradually improved to 17.03% in 2023 and further to 22.59% in 2024. Despite fluctuations, the ROA maintains generally strong values, reflecting effective use of assets to generate earnings.