Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover 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: 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 exhibited fluctuations over the observed periods, with values ranging from 75.56% to 81.23%. It started at a high point of 81.23% in 2020, declined to 75.56% in 2021, increased again to 79.03% in 2022, dropped to 75.87% in 2023, and rose to 78.15% in 2024. This indicates relative stability in gross profitability, though with some variability, suggesting periodic changes in cost of goods sold or pricing strategies.
- Operating Profit Margin
- The operating profit margin showed notable volatility across the years. It began at a modest 16.72% in 2020, surged to a peak of 36.72% in 2021, then decreased to 27.17% in 2022, slightly increased to 28.24% in 2023, and sharply declined to 5.81% in 2024. The significant peak in 2021 suggests enhanced operational efficiency or reduced operating expenses that year, followed by a downward trend that could reflect increased costs or reduced operating income in subsequent years.
- Net Profit Margin
- The net profit margin experienced a dramatic increase from 0.51% in 2020 to 23.05% in 2021, then declined to 17.02% in 2022, rose again to 21.03% in 2023, and dropped sharply to 1.68% in 2024. The initial surge indicates a substantial improvement in overall profitability after all expenses, possibly influenced by one-time gains or improved operational performance, while the later decline points to challenges in sustaining net income levels, especially in the most recent year.
- Return on Equity (ROE)
- The return on equity reflects similar patterns to the net profit margin, starting very low at 0.68% in 2020, increasing significantly to 29.55% in 2021, then decreasing to 21.62% in 2022, rising again somewhat to 24.81% in 2023, and finally declining to 2.48% in 2024. This suggests that shareholder profitability improved markedly in 2021, but recent years have seen erosion in the efficiency of generating returns on equity, possibly linked to profitability issues or changes in equity structure.
- Return on Assets (ROA)
- The return on assets mirrored the trends observed in ROE and net profit margin, rising sharply from 0.18% in 2020 to 9.16% in 2021, followed by a decrease to 7.27% in 2022, a recovery to 9.12% in 2023, and a steep decline to 0.81% in 2024. This indicates that asset utilization efficiency improved significantly in 2021 but has weakened substantially in the latest period, reflecting potential operational or asset management challenges.
Return on Sales
Return on Investment
Gross Profit Margin
Gilead Sciences 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 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: 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 on product sales ÷ Product sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Gross Profit on Product Sales
- The gross profit on product sales shows a generally increasing trend from 19,783 million US dollars in 2020 to 22,359 million US dollars in 2024. There is a slight decline observed in 2023 compared to 2022, where it decreased from 21,325 million to 20,436 million US dollars, before recovering in 2024.
- Product Sales
- Product sales increased consistently over the five-year period, starting at 24,355 million US dollars in 2020 and reaching 28,610 million US dollars in 2024. The growth was particularly notable between 2020 and 2021, with a sharp rise from 24,355 million to 27,008 million US dollars. This was followed by a plateau in 2022 and 2023, where sales remained around 26,900 million US dollars, before increasing again in 2024.
- Gross Profit Margin
- The gross profit margin fluctuated over the period, beginning at 81.23% in 2020 and then declining to 75.56% in 2021. It improved to 79.03% in 2022 but declined again to 75.87% in 2023. By 2024, the margin increased to 78.15%. Overall, the margin remained within a band of approximately 75.5% to 81.2%, indicating some variability in profitability relative to sales but maintaining a relatively high profitability level.
- Summary
- Over the five-year horizon, product sales have shown consistent growth with a slight stagnation in the middle years before resuming growth. Gross profit on product sales follows a similar pattern, with a dip in the penultimate year before rebounding. The gross profit margin has seen moderate fluctuations, suggesting variations in cost efficiency or pricing power year-to-year, though overall profitability remains strong. These trends indicate a generally positive performance with some variability in profit margins that may warrant further investigation into cost management or market conditions impacting profitability.
Operating Profit Margin
Gilead Sciences 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) | ||||||
| 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: 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 × Operating income ÷ Product sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Income
- The operating income demonstrated significant volatility over the observed period. There was a substantial increase from 4,071 million in 2020 to a peak of 9,918 million in 2021, followed by a decline to 7,330 million in 2022. The figure slightly increased again to 7,605 million in 2023 before sharply dropping to 1,662 million in 2024, indicating increased volatility and potential operational challenges or extraordinary factors impacting profitability in the most recent year.
- Product Sales
- Product sales showed a steady upward trend with minor fluctuations. Starting at 24,355 million in 2020, sales increased to 27,008 million in 2021 and remained relatively stable around 26,900 million in 2022 and 26,934 million in 2023. In 2024, product sales rose to 28,610 million, representing a moderate growth compared to previous years. This stability in sales suggests consistent demand and successful revenue generation through product offerings.
- Operating Profit Margin
- The operating profit margin exhibited considerable variability. It nearly doubled from 16.72% in 2020 to 36.72% in 2021, reflecting enhanced operational efficiency or favorable cost management during that period. However, this margin declined to 27.17% in 2022 and showed a slight recovery to 28.24% in 2023. In 2024, it dropped drastically to 5.81%, indicating a significant squeezing of profitability relative to revenues, possibly due to increased costs, pricing pressures, or other adverse operational factors.
- Overall Insights
- The data reveals a pattern of rising product sales with inconsistent operating profitability. Despite growing revenues through product sales, operating income and profit margins have fluctuated and notably declined in the latest year. This suggests that although market demand and sales volumes remain robust, the company faces challenges in maintaining operating efficiency and profitability, which may warrant further investigation into cost controls, pricing strategies, or extraordinary expenses affecting financial performance.
Net Profit Margin
Gilead Sciences 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 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: 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 attributable to Gilead ÷ Product sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income attributable to the company demonstrated significant volatility over the five-year period. Starting from a relatively low base of 123 million US dollars in 2020, net income surged dramatically to 6,225 million in 2021. However, this was followed by a decline to 4,592 million in 2022 and a partial recovery to 5,665 million in 2023. The year 2024 saw a steep drop to 480 million, indicating a considerable decrease in profitability compared to previous years.
- Product Sales
- Product sales exhibited a generally stable trend with slight fluctuations. There was an overall increase from 24,355 million US dollars in 2020 to 28,610 million in 2024. The sales figures peaked in 2024, marking the highest point in the period examined. Between 2021 and 2023, sales remained relatively constant, hovering around the 27,000 million mark.
- Net Profit Margin
- The net profit margin followed a pattern characterized by substantial variability. It rose sharply from a marginal 0.51% in 2020 to a robust 23.05% in 2021. Subsequently, the margin contracted to 17.02% in 2022, improved to 21.03% in 2023, and then precipitously declined to 1.68% in 2024. This fluctuation demonstrates periods of strong profitability followed by a notable weakening in 2024, despite the growth in sales during the same year.
- Overall Analysis
- The financial data reveal a disconnect between product sales growth and net income/profit margin trends, especially in the latest year. Although product sales increased steadily, profit-related metrics suffered a sharp decline in 2024. This suggests rising costs, pricing pressures, or other operational challenges impacting profitability. The earlier years show a pattern where profitability gains closely tracked sales performance, but this relationship appears to have deteriorated most recently. The period of exceptional net income and margin in 2021 stands out as an outlier compared to other years.
Return on Equity (ROE)
Gilead Sciences 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 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: 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 attributable to Gilead ÷ Total Gilead stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to Gilead
- The net income showed a significant increase from 123 million USD in 2020 to 6,225 million USD in 2021, representing substantial growth. However, the following years exhibited a decline. In 2022, net income decreased to 4,592 million USD, slightly recovered to 5,665 million USD in 2023, and then sharply fell to 480 million USD in 2024. This indicates high volatility and potential challenges impacting profitability in the most recent year.
- Total Gilead Stockholders’ Equity
- Stockholders’ equity displayed a steady upward trend from 18,202 million USD in 2020 to a peak of 22,833 million USD in 2023. Nevertheless, in 2024, equity decreased to 19,330 million USD, suggesting possible distributions to shareholders, losses, or other equity-reducing events in that year.
- Return on Equity (ROE)
- ROE followed a trend consistent with net income fluctuations. Starting at a low 0.68% in 2020, ROE surged to 29.55% in 2021, reflecting the sharp rise in profitability. Subsequently, ROE declined to 21.62% in 2022 and slightly increased to 24.81% in 2023, before plummeting to 2.48% in 2024. The sharp decline in 2024 corresponds with the significant drop in net income, indicating diminished effectiveness in generating returns from shareholders’ equity.
Return on Assets (ROA)
Gilead Sciences 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 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: 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 attributable to Gilead ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to Gilead (US$ in millions)
- The net income shows significant fluctuations over the reported period. Starting from a relatively low value of 123 million in 2020, there was a substantial increase to 6,225 million in 2021. This peak was followed by a decline to 4,592 million in 2022, a modest recovery to 5,665 million in 2023, and a sharp drop to 480 million in 2024. Overall, volatility is evident, with a notable spike in 2021 and a steep fall by the end of the period.
- Total Assets (US$ in millions)
- Total assets exhibit a declining trend throughout the years analyzed. Beginning at 68,407 million in 2020, assets slightly decreased to 67,952 million in 2021, followed by a continued reduction to 63,171 million in 2022, 62,125 million in 2023, and reaching 58,995 million in 2024. This steady decrease suggests a contraction in the asset base over time.
- Return on Assets (ROA, %)
- The ROA mirrors the fluctuations in net income with values starting extremely low at 0.18% in 2020, then rising sharply to 9.16% in 2021. A decline to 7.27% occurred in 2022, followed by a rebound to 9.12% in 2023. The ratio then declined again to 0.81% in 2024, indicating diminished profitability relative to assets in the final year. This pattern aligns with the net income volatility and reflects variable efficiency in asset utilization.