Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Linde plc, 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 a fluctuating yet overall upward trend over the five-year period. Starting at 43.53% in 2020, it slightly declined in 2021 and 2022 to 43.03% and 41.7%, respectively. However, in 2023, the margin increased significantly to 46.76% and further to 48.06% in 2024, indicating improved cost efficiency or pricing power in the latter years.
- Operating Profit Margin
- The operating profit margin showed substantial improvement during the reported years. From a relatively modest 12.19% in 2020, it rose sharply to 16.19% in 2021 and remained stable in 2022 at 16.09%. A marked increase was observed in 2023, reaching 24.42%, and continued growth led to 26.16% in 2024. This trend points to enhanced operational efficiency and better management of operating expenses.
- Net Profit Margin
- The net profit margin followed a trajectory similar to the operating margin, reflecting increasing profitability after all expenses. It increased from 9.18% in 2020 to 12.42% in 2021 and remained almost flat in 2022 at 12.43%. In 2023, the margin grew significantly to 18.87%, followed by a further increase to 19.89% in 2024. This indicates a solid improvement in overall profitability.
- Return on Equity (ROE)
- Return on equity displayed consistent growth throughout the period. Beginning at 5.29% in 2020, it increased steadily each year, reaching 8.69% in 2021, 10.36% in 2022, 15.61% in 2023, and 17.23% in 2024. This consistent rise suggests more effective use of shareholders' equity to generate profits over time.
- Return on Assets (ROA)
- The return on assets exhibited steady improvement, rising from 2.83% in 2020 to 4.69% in 2021 and then to 5.21% in 2022. The upward momentum accelerated in 2023 to 7.67% and continued to 8.19% in 2024. This indicates enhanced efficiency in utilizing assets to generate earnings across the evaluated period.
Return on Sales
Return on Investment
Gross Profit Margin
Linde plc, 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 margin | 15,862) | 15,362) | 13,914) | 13,250) | 11,860) | |
| Sales | 33,005) | 32,854) | 33,364) | 30,793) | 27,243) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 48.06% | 46.76% | 41.70% | 43.03% | 43.53% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Sherwin-Williams Co. | 48.47% | 46.67% | 42.10% | 42.83% | 47.29% | |
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 margin ÷ Sales
= 100 × 15,862 ÷ 33,005 = 48.06%
2 Click competitor name to see calculations.
- Gross Margin
- The gross margin demonstrated a consistent upward trajectory from 2020 through 2024. Starting at 11,860 million US dollars in 2020, it increased steadily each year, reaching 15,862 million US dollars in 2024. This trend reflects a positive development in the absolute profitability before operating expenses.
- Sales
- Sales figures showed a general increase from 27,243 million US dollars in 2020 to 33,364 million US dollars in 2022. However, in 2023, there was a slight decline to 32,854 million US dollars, followed by a modest recovery to 33,005 million US dollars in 2024. Overall, sales exhibited growth, but the loss and partial recovery in 2023 indicate some volatility in revenue generation during the period.
- Gross Profit Margin
- The gross profit margin percentage fluctuated over the observed years. It began at 43.53% in 2020, decreased to 41.7% by 2022, then significantly increased to 46.76% in 2023 and further to 48.06% in 2024. This upward shift in the latter years suggests improved efficiency in production or cost control, contributing to a higher ratio of gross profit relative to sales.
- Summary
- Overall, the data indicates growth in gross margin and sales with some fluctuations in annual sales figures. The improving gross profit margin percentage in later years points to enhancements in operational efficiency or cost management, which have more than offset the slight sales dip in 2023. The combination of increasing gross margin alongside relatively stable sales suggests strengthening profitability at the gross level over the five-year span.
Operating Profit Margin
Linde plc, 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 profit | 8,635) | 8,024) | 5,369) | 4,984) | 3,322) | |
| Sales | 33,005) | 32,854) | 33,364) | 30,793) | 27,243) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 26.16% | 24.42% | 16.09% | 16.19% | 12.19% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Sherwin-Williams Co. | 16.50% | 15.48% | 13.56% | 12.83% | 15.58% | |
| Operating Profit Margin, Sector | ||||||
| Chemicals | 22.19% | 20.73% | 15.08% | 14.87% | 13.56% | |
| Operating Profit Margin, Industry | ||||||
| Materials | 23.68% | 22.62% | 19.68% | 21.62% | 14.41% | |
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 profit ÷ Sales
= 100 × 8,635 ÷ 33,005 = 26.16%
2 Click competitor name to see calculations.
- Operating Profit
- The operating profit exhibits a consistent upward trajectory over the five-year period. It increased from $3,322 million in 2020 to $8,635 million in 2024, indicating strong profitability growth. The most significant jump occurred between 2022 and 2023, where operating profit rose sharply from $5,369 million to $8,024 million, suggesting improved operational efficiency or favorable market conditions during that timeframe.
- Sales
- Sales showed a steady increase from $27,243 million in 2020 to $33,364 million in 2022, reflecting growth in revenue generation. However, a slight decline is observed in 2023, with sales decreasing to $32,854 million from the previous year, followed by a marginal recovery to $33,005 million in 2024. This pattern suggests a leveling off of sales after initial growth, potentially signaling market saturation or competitive pressures affecting sales volume or pricing.
- Operating Profit Margin
- The operating profit margin experienced a notable improvement across the period. Starting at 12.19% in 2020, it increased steadily to reach 16.19% in 2021 and maintained a similar level at 16.09% in 2022. There is a substantial rise to 24.42% in 2023, continuing upwards to 26.16% in 2024. This sharp increase in margin, particularly from 2022 onward, indicates enhanced profitability relative to sales, suggesting better cost control, higher pricing power, or a shift toward more profitable product lines.
- Overall Analysis
- The data reflects a company that has effectively increased its profitability over the years, driven primarily by significant improvements in operating profit and operating profit margin, despite a plateauing sales figure in the latter years. The divergence between rising profits and relatively flat sales in recent years points to improved operational efficiencies or cost management rather than revenue growth as the key driver of financial performance. The marked increase in operating profit margin in 2023 and 2024 is particularly notable for its scale and suggests successful strategic initiatives during this period.
Net Profit Margin
Linde plc, net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income, Linde plc | 6,565) | 6,199) | 4,147) | 3,826) | 2,501) | |
| Sales | 33,005) | 32,854) | 33,364) | 30,793) | 27,243) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 19.89% | 18.87% | 12.43% | 12.42% | 9.18% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Sherwin-Williams Co. | 11.61% | 10.36% | 9.12% | 9.35% | 11.06% | |
| Net Profit Margin, Sector | ||||||
| Chemicals | 16.48% | 15.36% | 11.11% | 11.22% | 9.94% | |
| Net Profit Margin, Industry | ||||||
| Materials | 13.65% | 13.25% | 12.31% | 13.59% | 8.58% | |
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, Linde plc ÷ Sales
= 100 × 6,565 ÷ 33,005 = 19.89%
2 Click competitor name to see calculations.
- Net income
- The net income demonstrates a consistent upward trajectory over the analyzed period. Starting at 2,501 million US dollars in 2020, it rose significantly to 3,826 million in 2021, reflecting strong growth. This upward trend continued with 4,147 million in 2022, followed by a more pronounced increase to 6,199 million in 2023, and reaching 6,565 million in 2024. The pattern indicates substantial improvement in profitability.
- Sales
- Sales figures show a steady increase from 27,243 million US dollars in 2020 to 33,364 million in 2022. However, sales slightly declined to 32,854 million in 2023 before recovering marginally to 33,005 million in 2024. Overall, the sales performance demonstrates moderate growth with some stabilization in the later years.
- Net profit margin
- The net profit margin increased from 9.18% in 2020 to 12.42% in 2021, maintaining a similar level of 12.43% in 2022. Subsequently, there is a notable improvement in margin efficiency, rising to 18.87% in 2023 and further to 19.89% in 2024. This trend suggests enhanced cost management and profitability relative to sales over time.
- Summary
- Overall, the data illustrates consistent growth in net income accompanied by a steady increase in sales, albeit with a slight dip in 2023. The significant improvement in net profit margin from 2022 onwards indicates an increase in operational efficiency and profitability. These patterns reflect a positive financial performance trend with enhanced profit generation relative to sales.
Return on Equity (ROE)
Linde plc, 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, Linde plc | 6,565) | 6,199) | 4,147) | 3,826) | 2,501) | |
| Total Linde plc shareholders’ equity | 38,092) | 39,720) | 40,028) | 44,035) | 47,317) | |
| Profitability Ratio | ||||||
| ROE1 | 17.23% | 15.61% | 10.36% | 8.69% | 5.29% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Sherwin-Williams Co. | 66.19% | 64.29% | 65.12% | 76.50% | 56.23% | |
| ROE, Sector | ||||||
| Chemicals | 21.94% | 19.77% | 14.30% | 12.24% | 8.90% | |
| ROE, Industry | ||||||
| Materials | 18.64% | 17.36% | 16.42% | 16.54% | 8.40% | |
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, Linde plc ÷ Total Linde plc shareholders’ equity
= 100 × 6,565 ÷ 38,092 = 17.23%
2 Click competitor name to see calculations.
- Net Income Trend
- The net income of the company exhibited a consistent upward trajectory over the five-year period. From US$ 2,501 million in 2020, net income increased substantially each subsequent year, reaching US$ 6,565 million by the end of 2024. This represents an overall growth of approximately 162% over the period.
- Shareholders’ Equity Movement
- In contrast to net income, total shareholders’ equity showed a declining trend throughout the timeframe. It decreased from US$ 47,317 million in 2020 to US$ 38,092 million in 2024, reflecting a reduction of nearly 20%. The equity value declined gradually year over year, with the most significant drops occurring between 2020 and 2022.
- Return on Equity (ROE) Analysis
- The return on equity demonstrated a strong positive trend, increasing steadily from 5.29% in 2020 to 17.23% in 2024. This improvement indicates enhanced efficiency in generating profits from shareholders’ equity, with a more than threefold increase in ROE over the five years.
- Overall Insights
- The data suggests that the company has been increasingly successful in generating profits, as shown by rising net income and ROE figures. The decline in shareholders’ equity alongside rising net income and ROE could imply that the company may be returning capital to shareholders or experiencing accumulated losses affecting equity, though profitability metrics indicate strong operational performance. The increasing ROE highlights improved utilization of equity to generate earnings.
Return on Assets (ROA)
Linde plc, 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, Linde plc | 6,565) | 6,199) | 4,147) | 3,826) | 2,501) | |
| Total assets | 80,147) | 80,811) | 79,658) | 81,605) | 88,229) | |
| Profitability Ratio | ||||||
| ROA1 | 8.19% | 7.67% | 5.21% | 4.69% | 2.83% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Sherwin-Williams Co. | 11.35% | 10.41% | 8.94% | 9.02% | 9.95% | |
| ROA, Sector | ||||||
| Chemicals | 8.91% | 8.28% | 6.03% | 5.56% | 4.17% | |
| ROA, Industry | ||||||
| Materials | 7.02% | 6.68% | 6.28% | 6.65% | 3.40% | |
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, Linde plc ÷ Total assets
= 100 × 6,565 ÷ 80,147 = 8.19%
2 Click competitor name to see calculations.
- Net Income
- The net income exhibits a consistent upward trend over the five-year period. Starting at 2,501 million US dollars in 2020, it increased significantly each year, reaching 6,565 million US dollars by 2024. The largest annual increase occurred between 2022 and 2023, suggesting a period of strong profitability growth.
- Total Assets
- Total assets showed a declining pattern from 2020 to 2022, falling from 88,229 million US dollars to 79,658 million US dollars. In 2023, assets slightly increased to 80,811 million US dollars, followed by a minor decrease to 80,147 million US dollars in 2024. Overall, total assets remain relatively stable in the latter years after the initial decline.
- Return on Assets (ROA)
- ROA improved markedly across the period, reflecting increased efficiency in generating net income from the asset base. It rose from 2.83% in 2020 to 8.19% in 2024. The most notable improvements occurred after 2021, corresponding with the periods of increased net income despite relatively stable or declining asset levels.
- Summary of Trends and Insights
- The data indicates strong profitability growth marked by increasing net income and improving ROA, despite a slight contraction and then stabilization in total asset levels. This suggests enhanced asset utilization and operational efficiency over time. The divergence between net income growth and relatively flat assets implies that returns are driven more by profit margin improvements or other operational factors rather than asset base expansion.