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Stock Analysis on Net

Roper Technologies Inc. (NASDAQ:ROP)

This company has been moved to the archive! The financial data has not been updated since November 2, 2023.

Common-Size Income Statement

Roper Technologies Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018
Net revenues 100.00 100.00 100.00 100.00 100.00
Cost of sales -30.14 -32.20 -35.90 -36.14 -36.83
Gross profit 69.86% 67.80% 64.10% 63.86% 63.17%
Selling, general and administrative expenses -41.48 -40.46 -38.21 -35.94 -36.27
Impairment of intangible assets 0.00 -1.72 0.00 0.00 0.00
Income from operations 28.38% 25.62% 25.89% 27.92% 26.90%
Interest expense, net -3.58 -4.05 -3.96 -3.48 -3.51
Loss on extinguishment of debt 0.00 0.00 0.00 0.00 -0.31
Other income (expense), net -0.93 0.43 -0.05 -0.10 0.00
Gain on disposal of businesses 0.00 0.00 0.00 17.16 0.00
Earnings before income taxes 23.87% 22.00% 21.88% 41.50% 23.09%
Income taxes -5.52 -4.99 -4.70 -8.56 -4.89
Net earnings from continuing operations 18.35% 17.01% 17.18% 32.94% 18.19%
Earnings from discontinued operations, net of tax 3.78 1.97 0.00 0.00 0.00
Gain on disposition of discontinued operations, net of tax 62.48 0.97 0.00 0.00 0.00
Net earnings from discontinued operations 66.26% 2.94% 0.00% 0.00% 0.00%
Net earnings 84.60% 19.95% 17.18% 32.94% 18.19%

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 common-size income statement reveals a strategic expansion in gross margins offset by rising operating expenses and significant volatility in net earnings due to non-recurring divestitures.

Gross Profitability and Cost Management
A consistent upward trend in gross profit margins is observed, increasing from 63.17% in 2018 to 69.86% in 2022. This improvement is directly attributable to a steady reduction in the cost of sales, which declined from 36.83% to 30.14% of net revenues over the five-year period.
Operating Expense Trends
Selling, general, and administrative expenses have demonstrated a persistent increase, rising from 36.27% of net revenues in 2018 to 41.48% in 2022. The growth in these expenses has largely neutralized the gains achieved in the cost of sales, keeping the income from operations relatively stable, with values ranging between 25.62% and 28.38%.
Financial and Non-Operating Performance
Net interest expenses remained stable, fluctuating within a narrow band between 3.48% and 4.05% of net revenues. Other income and expenses remained immaterial to the overall result, with a minor impairment of intangible assets noted in 2021 at 1.72% of revenues.
Net Earnings and Extraordinary Items
Net earnings have been characterized by extreme volatility driven by non-operational gains. While earnings from continuing operations generally stabilized around 17% to 18%, the overall net earnings were skewed by significant events: a gain on the disposal of businesses in 2019 (17.16% of revenues) and a substantial gain on the disposition of discontinued operations in 2022 (62.48% of revenues), which propelled the 2022 net earnings to 84.60%.

In summary, the operational core of the business shows improved production efficiency and margin expansion, though these gains are countered by increasing administrative costs. The bottom-line profitability has been primarily driven by strategic portfolio restructuring and the sale of business segments rather than organic operating growth.

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