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
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
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Profitability Ratios (Summary)
Gilead Sciences Inc., profitability ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
The profitability metrics exhibit considerable fluctuation over the five-year period. Initial stability gives way to a marked decline in 2022, followed by recovery and then a significant surge in the most recent year presented. This pattern is evident across all reported ratios, though the magnitude of change varies.
- Gross Profit Margin
- The gross profit margin demonstrates relative consistency, fluctuating between 75.56% and 79.03% from 2021 to 2023. A slight increase is observed in 2024 and 2025, reaching 78.15% and 78.44% respectively. This suggests a stable ability to control the cost of goods sold throughout the period.
- Operating Profit Margin
- The operating profit margin experienced a substantial decrease from 36.72% in 2021 to 27.17% in 2022. A modest recovery to 28.24% occurred in 2023, but this was followed by a dramatic drop to 5.81% in 2024. The metric then rebounded sharply to 34.66% in 2025, exceeding the initial value from 2021. This volatility indicates significant changes in operational efficiency or operating expenses.
- Net Profit Margin
- Mirroring the trend in operating profit margin, the net profit margin declined from 23.05% in 2021 to 17.02% in 2022. It partially recovered to 21.03% in 2023 before plummeting to 1.68% in 2024. A substantial increase to 29.43% is then seen in 2025, surpassing the 2021 level. This suggests that net income is highly sensitive to changes in operational performance and other income/expense items.
- Return on Equity (ROE)
- The return on equity followed a similar trajectory to the profit margins. A decrease from 29.55% in 2021 to 21.62% in 2022 was observed, followed by a recovery to 24.81% in 2023. A significant decline to 2.48% occurred in 2024, before a substantial increase to 37.48% in 2025. This indicates a fluctuating ability to generate profit from shareholder investments.
- Return on Assets (ROA)
- The return on assets exhibited a pattern consistent with the other ratios. It decreased from 9.16% in 2021 to 7.27% in 2022, recovered to 9.12% in 2023, then fell sharply to 0.81% in 2024. A strong recovery to 14.42% is evident in 2025, indicating improved efficiency in utilizing assets to generate earnings.
The pronounced dip in profitability metrics in 2024, followed by a strong recovery in 2025, warrants further investigation to determine the underlying drivers of these changes. The consistent pattern across all ratios suggests a systemic factor influencing overall profitability.
Return on Sales
Return on Investment
Gross Profit Margin
Gilead Sciences Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit on product sales | ||||||
| Product sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Gross profit margin = 100 × Gross profit on product sales ÷ Product sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited fluctuations over the five-year period. While generally remaining at a high level, the metric demonstrated both increases and decreases, suggesting shifts in the cost structure relative to product sales.
- Gross Profit on Product Sales
- Gross profit on product sales generally increased from 2021 to 2025, with a slight decrease observed between 2021 and 2022, followed by a more pronounced decrease between 2022 and 2023. Subsequent years showed increases, culminating in a value of US$22,681 million in 2025. This indicates potential variations in production costs or pricing strategies.
- Product Sales
- Product sales remained relatively stable between 2021 and 2023, fluctuating around US$27 billion. A noticeable increase occurred between 2023 and 2024, reaching US$28,610 million, and continued to rise to US$28,915 million in 2025. This suggests a strengthening of sales volume or pricing power in the later years of the period.
- Gross Profit Margin
- The gross profit margin increased from 75.56% in 2021 to a peak of 79.03% in 2022. A subsequent decline to 75.87% was observed in 2023. The margin then recovered, reaching 78.15% in 2024 and further increasing to 78.44% in 2025. This pattern suggests that while the company maintains a strong gross profit margin, it is susceptible to changes in cost of goods sold or pricing pressures. The increase in 2024 and 2025, despite rising product sales, indicates improved cost management or a shift towards higher-margin products.
Overall, the observed trends suggest a dynamic relationship between product sales, gross profit, and the resulting margin. The company appears to have effectively managed its costs in the latter part of the period, allowing for margin expansion despite increasing sales.
Operating Profit Margin
Gilead Sciences Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Product sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Operating Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Operating profit margin = 100 × Operating income ÷ Product sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited considerable fluctuation over the five-year period. Initial values were relatively high, followed by a significant decline, and then a partial recovery culminating in a return to levels approaching those initially observed.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 36.72% in 2021. A substantial decrease was noted in 2022, falling to 27.17%. This downward trend continued modestly into 2023, reaching 28.24%. A dramatic reduction occurred in 2024, with the margin plummeting to 5.81%. A strong recovery was then observed in 2025, with the margin increasing to 34.66%.
- Relationship to Operating Income
- The decline in operating profit margin in 2022 and 2023 coincided with a decrease in operating income. However, the sharp drop in margin in 2024 was disproportionate to the change in operating income, suggesting a significant increase in operating expenses relative to revenue. The substantial increase in operating profit margin in 2025 occurred alongside a considerable rise in operating income, indicating improved operational efficiency or cost control.
- Relationship to Product Sales
- Product sales remained relatively stable between 2021 and 2023, fluctuating within a narrow range. A noticeable increase in product sales occurred in 2024 and 2025. Despite the increase in sales in 2024, the operating profit margin decreased significantly, indicating that the cost of goods sold and/or operating expenses increased at a faster rate than revenue. The margin improvement in 2025, coupled with continued sales growth, suggests a more favorable cost structure.
The volatility in the operating profit margin warrants further investigation into the underlying drivers of operating income and expenses. The significant decline in 2024, despite increased product sales, is a particular area of concern and requires detailed analysis.
Net Profit Margin
Gilead Sciences Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Gilead | ||||||
| Product sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Net Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net profit margin = 100 × Net income attributable to Gilead ÷ Product sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited considerable fluctuation over the five-year period. Initial values demonstrated a strong profitability position, followed by a period of decline, and then a substantial recovery.
- Overall Trend
- The net profit margin began at 23.05% in 2021, decreased to a low of 1.68% in 2024, and then increased significantly to 29.43% in 2025. This represents a volatile pattern, with a marked improvement in the most recent year.
- 2021-2022
- A decrease in net profit margin is observed from 2021 to 2022, moving from 23.05% to 17.02%. This decline occurred despite relatively stable product sales, suggesting increased costs or other factors impacting profitability.
- 2022-2023
- The net profit margin experienced a recovery between 2022 and 2023, rising from 17.02% to 21.03%. This improvement indicates a positive shift in the company’s ability to convert product sales into profit.
- 2023-2024
- A substantial decline in net profit margin occurred from 2023 to 2024, falling from 21.03% to 1.68%. This represents a significant erosion of profitability, despite a modest increase in product sales. This period warrants further investigation to identify the underlying causes.
- 2024-2025
- A dramatic increase in net profit margin is evident from 2024 to 2025, with the margin jumping to 29.43%. This substantial improvement suggests a significant positive change in the company’s cost structure or revenue generation capabilities. Product sales also increased during this period, contributing to the improved margin.
The considerable volatility in the net profit margin suggests the company’s profitability is sensitive to changes in underlying business conditions. The recent improvement in 2025 is encouraging, but the prior decline to 1.68% highlights potential vulnerabilities.
Return on Equity (ROE)
Gilead Sciences Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Gilead | ||||||
| Total Gilead stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| ROE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| ROE, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
ROE = 100 × Net income attributable to Gilead ÷ Total Gilead stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited considerable fluctuation over the five-year period. Initial values were strong, followed by a significant decline, and then a substantial recovery.
- Overall Trend
- The ROE began at 29.55% in 2021, decreased to a low of 2.48% in 2024, and then increased sharply to 37.48% in 2025. This represents a volatile pattern, indicating significant shifts in the company’s profitability relative to shareholder equity.
- 2021-2022
- A noticeable decrease in ROE occurred between 2021 and 2022, falling from 29.55% to 21.62%. This decline coincided with a decrease in net income attributable to Gilead, while total stockholders’ equity remained relatively stable.
- 2022-2023
- The ROE experienced a partial recovery between 2022 and 2023, increasing to 24.81%. This improvement was driven by an increase in net income, despite a continued rise in total stockholders’ equity.
- 2023-2024
- A dramatic decline in ROE was observed from 2023 to 2024, plummeting to 2.48%. This substantial decrease was primarily attributable to a significant reduction in net income attributable to Gilead, coupled with a decrease in total stockholders’ equity.
- 2024-2025
- The ROE rebounded strongly between 2024 and 2025, reaching 37.48%. This substantial increase was fueled by a considerable rise in net income attributable to Gilead, alongside a moderate increase in total stockholders’ equity. The 2025 ROE represents the highest value within the observed period.
The volatility in ROE suggests that the company’s profitability is sensitive to changes in net income and shareholder equity. The significant recovery in 2025 indicates a potential turnaround in performance, but the prior fluctuations warrant further investigation to understand the underlying drivers of these changes.
Return on Assets (ROA)
Gilead Sciences Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Gilead | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| ROA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| ROA, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
ROA = 100 × Net income attributable to Gilead ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited considerable fluctuation over the five-year period. Initial values demonstrated a generally positive performance, followed by a significant decline and subsequent recovery.
- Overall Trend
- The ROA began at 9.16% in 2021, decreased to 7.27% in 2022, and then rose to 9.12% in 2023. A substantial drop occurred in 2024, with the ROA falling to 0.81%. The final year, 2025, showed a dramatic increase, reaching 14.42%.
- Year-over-Year Changes
- From 2021 to 2022, the ROA decreased by 1.89 percentage points. A subsequent increase of 1.85 percentage points was observed from 2022 to 2023. The most significant change occurred between 2023 and 2024, with a decrease of 8.31 percentage points. Finally, the ROA increased by 13.61 percentage points from 2024 to 2025.
- Relationship to Net Income and Total Assets
- The decline in ROA in 2024 coincided with a significant reduction in net income attributable to the company, while total assets continued to decrease, albeit at a slower rate. The substantial increase in ROA in 2025 was driven by a considerable rise in net income, coupled with relatively stable total assets. This suggests a strong correlation between profitability and the ROA.
The volatility in ROA indicates a sensitivity to changes in net income. The company’s ability to generate earnings from its asset base varied considerably throughout the period, with 2024 representing a period of notably lower efficiency in asset utilization.