Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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Profitability Ratios (Summary)
Paramount Global, profitability ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The analysis of the financial ratios over the five-year period reveals notable patterns and fluctuations in profitability and efficiency metrics.
- Gross Profit Margin
- The gross profit margin showed an overall decreasing trend after peaking in 2020 at 40.71%. It increased modestly from 37.23% in 2018 to 38.07% in 2019, then further rose to the peak in 2020. However, the margin declined in subsequent years, falling to 37.93% in 2021 and more sharply to 34.19% in 2022, indicating potential rising costs or pressure on pricing.
- Operating Profit Margin
- This margin displayed volatility throughout the period. It started relatively high at 19.07% in 2018, fell to 15.36% in 2019, before a slight recovery to 16.37% in 2020. There was a significant increase to 22.03% in 2021, suggesting improved operational efficiency or favorable conditions that year. However, a substantial decline occurred in 2022, dropping to 7.77%, which signals rising operating expenses or lower revenue efficiency.
- Net Profit Margin
- The net profit margin followed a generally declining pattern with some recovery. It decreased from 13.5% in 2018 to 11.89% in 2019 and further to 9.58% in 2020. An improvement occurred in 2021, rising to 15.89%, likely reflecting better operational performance or lower non-operating expenses. In 2022, however, the margin drastically shrank to 3.66%, pointing to significant challenges in converting revenue into net income.
- Return on Equity (ROE)
- ROE exhibited a steep downward trajectory throughout the period. It started extremely high at 69.9% in 2018, then sharply declined to 25.05% in 2019 and continued to decrease to 15.76% in 2020. Despite a slight rebound to 20.28% in 2021, it fell considerably again to 4.79% in 2022. This trend reflects diminishing effectiveness in generating profit from shareholders' equity.
- Return on Assets (ROA)
- The return on assets also demonstrated a declining trend. It fell from 8.97% in 2018 to 6.68% in 2019, then to 4.6% in 2020. There was a recovery in 2021 to 7.75%, followed by a significant drop to 1.89% in 2022. This indicates decreasing asset utilization efficiency to generate profits, especially pronounced in the most recent year.
In summary, the company experienced declines in its core profitability and efficiency ratios over the five-year span, with intermittent recovery in 2021. The substantial decreases observed in 2022 across all key metrics suggest increasing operational and financial challenges impacting overall performance.
Return on Sales
Return on Investment
Gross Profit Margin
Paramount Global, gross profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Walt Disney Co. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Revenues
- Revenues display a marked increase from 14,514 million US dollars in 2018 to 30,154 million US dollars in 2022, more than doubling over the five-year period. There is a notable spike between 2018 and 2019, followed by a decline in 2020, which may be related to external factors impacting the year. Subsequently, revenues recovered and continued to grow through 2021 and 2022.
- Gross Profit
- Gross profit follows an upward trajectory similar to revenues, rising from 5,403 million US dollars in 2018 to peak at 10,842 million in 2021, before slightly declining to 10,309 million in 2022. Despite the overall growth, the slight dip in the final year contrasts with the ongoing revenue increase, suggesting pressure on profit margins or increased costs.
- Gross Profit Margin
- The gross profit margin exhibits variability over the years. Starting at 37.23% in 2018, it slightly increased in 2019 and peaked at 40.71% in 2020, corresponding with the revenue dip that year. Afterward, the margin declined to 37.93% in 2021 and further decreased to 34.19% in 2022. This downward trend in margin despite rising revenues may indicate challenges such as increased production costs, pricing pressures, or changes in product mix.
- Summary
- Overall, the data indicate strong revenue growth over the period, tempered by fluctuations in profit margins. The decline in gross profit margin in the last two years, despite revenue growth, warrants further investigation into cost structures and operational efficiency. The peak in gross margin in 2020 alongside reduced revenues suggests that while sales volume declined, pricing or cost management temporarily improved profitability ratios before normalizing and declining thereafter.
Operating Profit Margin
Paramount Global, operating profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Walt Disney Co. | ||||||
| Operating Profit Margin, Sector | ||||||
| Media & Entertainment | ||||||
| Operating Profit Margin, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating profit margin = 100 × Operating income ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data shows notable fluctuations in key operational metrics over the five-year period ending December 31, 2022.
- Revenues
- Revenues increased substantially from 14,514 million US dollars in 2018 to 30,154 million US dollars in 2022. This represents more than a doubling of revenue within this timeframe. Although there was a slight decline in 2020 to 25,285 million US dollars, revenues rebounded and continued to grow through 2021 and 2022, indicating a generally strong upward trend.
- Operating Income
- Operating income exhibited considerable volatility. After rising from 2,768 million US dollars in 2018 to 4,273 million in 2019, it declined slightly in 2020 to 4,139 million. It then peaked at 6,297 million in 2021, before sharply dropping to 2,342 million in 2022. This decline in 2022 contrasts with the continued revenue growth, suggesting pressure on operating profitability during this period.
- Operating Profit Margin
- The operating profit margin declined from 19.07% in 2018 to 15.36% in 2019 and hovered around 16% in 2020. There was a marked improvement in 2021, when the margin reached 22.03%, the highest point in the period. However, the margin then decreased dramatically to 7.77% in 2022, the lowest level observed. This sharp decline corresponds with the substantial drop in operating income despite revenue increases, signaling increased costs or lower efficiency impacting profitability in 2022.
Overall, the data reveals robust revenue growth alongside increasing volatility and a recent significant contraction in operating profitability. The 2021 peak in operating income and margin suggests an improvement in operational efficiency or cost management that was not sustained into 2022, where profitability was notably pressured.
Net Profit Margin
Paramount Global, net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to Paramount | ||||||
| Revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Walt Disney Co. | ||||||
| Net Profit Margin, Sector | ||||||
| Media & Entertainment | ||||||
| Net Profit Margin, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net profit margin = 100 × Net earnings attributable to Paramount ÷ Revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends across the analyzed periods.
- Revenues
- Revenues show an overall upward trend from 2018 to 2022. Starting at $14,514 million in 2018, revenues nearly doubled in 2019 reaching $27,812 million. Although there was a slight decline in 2020 to $25,285 million, revenues recovered and continued to grow in 2021 to $28,586 million and further increased to $30,154 million in 2022. This suggests robust growth and relatively stable revenue generation toward the end of the period.
- Net earnings attributable to Paramount
- Net earnings exhibit volatility with a general upward movement until 2021 followed by a sharp decline in 2022. After beginning at $1,960 million in 2018, net earnings surged to $3,308 million in 2019. Earnings fell to $2,422 million in 2020 but rose significantly to reach a peak of $4,543 million in 2021. In 2022, net earnings dropped markedly to $1,104 million, the lowest of the observed years, indicating considerable profit pressure or one-time impacts affecting profitability.
- Net profit margin
- Net profit margin fluctuates considerably, reflecting the variability in net earnings relative to revenues. The margin started at 13.5% in 2018 and fell progressively to 9.58% in 2020 despite growing revenues in the previous years. It rebounded sharply to 15.89% in 2021, the highest in the period, indicating improved operational efficiency or favorable extraordinary factors. In 2022, the margin plunged to 3.66%, corresponding with the drop in net earnings despite the revenue increase, signaling reduced profitability.
Overall, the data indicates steady revenue growth with considerable volatility in profitability metrics. The peak profitability in 2021 contrasts sharply with the steep profit decline in 2022, highlighting possible challenges in cost management, increased expenses, or other impacting factors in the most recent year.
Return on Equity (ROE)
Paramount Global, ROE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to Paramount | ||||||
| Total Paramount stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Walt Disney Co. | ||||||
| ROE, Sector | ||||||
| Media & Entertainment | ||||||
| ROE, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROE = 100 × Net earnings attributable to Paramount ÷ Total Paramount stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals significant fluctuations in net earnings attributable to the company over the five-year period. Net earnings rose from 1,960 million USD in 2018 to a peak of 4,543 million USD in 2021, indicating a strong performance during this period. However, there was a sharp decline to 1,104 million USD in 2022, suggesting a notable decrease in profitability in the most recent year.
Total stockholders’ equity showed a consistent upward trend throughout the period. Beginning at 2,804 million USD in 2018, equity increased markedly each year, reaching 23,036 million USD by the end of 2022. This growth in equity reflects ongoing accumulation of capital and retained earnings, supporting stronger financial stability and increased company value.
Return on equity (ROE) exhibited a declining pattern over the years. Starting at a very high level of 69.9% in 2018, ROE decreased substantially to 25.05% in 2019, followed by further reductions to 15.76% in 2020 and 20.28% in 2021. In 2022, it fell sharply to 4.79%. This downward trend in ROE despite rising equity suggests a diminishing efficiency in utilizing shareholders’ equity to generate earnings. The steep drop in 2022 may be linked to the significant decline in net earnings during that year.
- Net Earnings
- Increased substantially from 2018 through 2021, followed by a significant decrease in 2022.
- Total Stockholders’ Equity
- Steadily increased throughout the period, reflecting accumulation of capital and retained earnings.
- Return on Equity (ROE)
- Declined significantly from an exceptionally high level in 2018 to a much lower level in 2022, indicating reduced profitability relative to equity.
Return on Assets (ROA)
Paramount Global, ROA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to Paramount | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Alphabet Inc. | ||||||
| Comcast Corp. | ||||||
| Meta Platforms Inc. | ||||||
| Netflix Inc. | ||||||
| Walt Disney Co. | ||||||
| ROA, Sector | ||||||
| Media & Entertainment | ||||||
| ROA, Industry | ||||||
| Communication Services | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROA = 100 × Net earnings attributable to Paramount ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data over the five-year period reveals significant fluctuations in key performance metrics. The net earnings attributable to the company show an overall variable trend. After increasing from 1,960 million US dollars in 2018 to a peak of 3,308 million in 2019, there was a decline to 2,422 million in 2020, followed by a strong recovery reaching 4,543 million in 2021. However, in 2022, net earnings sharply decreased to 1,104 million, the lowest level in the last five years.
Total assets have exhibited a general upward trend throughout the period. The value more than doubled from 21,859 million US dollars in 2018 to 49,519 million in 2019. This was followed by smaller increases, reaching 52,663 million in 2020 and 58,620 million in 2021. In 2022, the total assets slightly declined to 58,393 million but largely remained at a high level compared to the earlier years.
The return on assets (ROA) percentage has shown notable variability and a declining trend in the most recent year. Starting at 8.97% in 2018, it decreased to 6.68% in 2019 and further to 4.6% in 2020. The ratio rebounded to 7.75% in 2021 but then fell significantly to 1.89% in 2022, suggesting a reduced efficiency in generating earnings from the asset base in that year.
- Net Earnings
- Presented fluctuations with a peak in 2021 and a sharp decrease in 2022, indicating volatility in profitability.
- Total Assets
- Steady growth overall, with a significant increase from 2018 to 2019, stabilizing at higher levels thereafter.
- Return on Assets (ROA)
- Variable trend with initial decline, partial recovery, and a steep drop in 2022, reflecting changing asset utilization efficiency.