Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Synopsys Inc., profitability ratios
Based on: 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Synopsys Inc. gross profit margin ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Synopsys Inc. operating profit margin ratio improved from 2020 to 2021 and from 2021 to 2022. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Synopsys Inc. net profit margin ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Synopsys Inc. ROE improved from 2020 to 2021 and from 2021 to 2022. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Synopsys Inc. ROA improved from 2020 to 2021 and from 2021 to 2022. |
Gross Profit Margin
Synopsys Inc., gross profit margin calculation, comparison to benchmarks
| Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | Oct 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Gross margin | 4,017,845) | 3,342,416) | 2,890,591) | 2,607,748) | 2,385,160) | 2,070,696) | |
| Revenue | 5,081,542) | 4,204,193) | 3,685,281) | 3,360,694) | 3,121,058) | 2,724,880) | |
| Profitability Ratio | |||||||
| Gross profit margin1 | 79.07% | 79.50% | 78.44% | 77.60% | 76.42% | 75.99% | |
| Benchmarks | |||||||
| Gross Profit Margin, Competitors2 | |||||||
| Accenture PLC | 31.99% | 32.38% | 31.53% | 30.81% | 29.91% | 30.00% | |
| Adobe Inc. | 87.70% | 88.18% | 86.62% | 85.03% | 86.77% | 86.16% | |
| International Business Machines Corp. | 54.00% | 54.90% | 48.32% | 47.30% | 46.41% | — | |
| Intuit Inc. | 81.09% | 82.53% | 82.05% | 82.80% | 83.62% | — | |
| Microsoft Corp. | 68.40% | 68.93% | 67.78% | 65.90% | 65.25% | — | |
| Oracle Corp. | 79.08% | 80.59% | 79.68% | 79.76% | 79.71% | — | |
| Palo Alto Networks Inc. | 68.76% | 70.05% | 70.68% | 72.12% | 71.61% | — | |
| Salesforce Inc. | 73.48% | 74.41% | 75.23% | 74.02% | 73.54% | — | |
| ServiceNow Inc. | 78.29% | 77.05% | 78.16% | 76.98% | 76.13% | — | |
Based on: 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31).
1 2022 Calculation
Gross profit margin = 100 × Gross margin ÷ Revenue
= 100 × 4,017,845 ÷ 5,081,542 = 79.07%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Synopsys Inc. gross profit margin ratio improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022. |
Operating Profit Margin
Synopsys Inc., operating profit margin calculation, comparison to benchmarks
| Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | Oct 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Operating income | 1,162,038) | 734,790) | 620,141) | 520,231) | 360,225) | 347,563) | |
| Revenue | 5,081,542) | 4,204,193) | 3,685,281) | 3,360,694) | 3,121,058) | 2,724,880) | |
| Profitability Ratio | |||||||
| Operating profit margin1 | 22.87% | 17.48% | 16.83% | 15.48% | 11.54% | 12.76% | |
| Benchmarks | |||||||
| Operating Profit Margin, Competitors2 | |||||||
| Accenture PLC | 15.21% | 15.08% | 14.69% | 14.59% | 14.04% | 12.60% | |
| Adobe Inc. | 34.64% | 36.76% | 32.93% | 29.25% | 31.45% | 29.69% | |
| International Business Machines Corp. | 13.50% | 11.97% | 9.22% | 13.67% | 16.61% | — | |
| Intuit Inc. | 20.20% | 25.95% | 28.34% | 27.33% | 25.10% | — | |
| Microsoft Corp. | 42.06% | 41.59% | 37.03% | 34.14% | 31.77% | — | |
| Oracle Corp. | 25.74% | 37.58% | 35.57% | 34.26% | 34.34% | — | |
| Palo Alto Networks Inc. | -3.43% | -7.15% | -5.25% | -1.87% | -5.68% | — | |
| Salesforce Inc. | 2.07% | 2.14% | 1.74% | 4.03% | 2.25% | — | |
| ServiceNow Inc. | 4.90% | 4.36% | 4.40% | 1.22% | -1.63% | — | |
| Operating Profit Margin, Sector | |||||||
| Software & Services | 27.98% | 28.89% | 25.05% | 24.34% | 23.80% | — | |
| Operating Profit Margin, Industry | |||||||
| Information Technology | 28.45% | 28.75% | 24.95% | 25.41% | 26.33% | — | |
Based on: 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31).
1 2022 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 1,162,038 ÷ 5,081,542 = 22.87%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Synopsys Inc. operating profit margin ratio improved from 2020 to 2021 and from 2021 to 2022. |
Net Profit Margin
Synopsys Inc., net profit margin calculation, comparison to benchmarks
| Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | Oct 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income attributed to Synopsys | 984,594) | 757,516) | 664,347) | 532,367) | 432,518) | 136,563) | |
| Revenue | 5,081,542) | 4,204,193) | 3,685,281) | 3,360,694) | 3,121,058) | 2,724,880) | |
| Profitability Ratio | |||||||
| Net profit margin1 | 19.38% | 18.02% | 18.03% | 15.84% | 13.86% | 5.01% | |
| Benchmarks | |||||||
| Net Profit Margin, Competitors2 | |||||||
| Accenture PLC | 11.17% | 11.69% | 11.52% | 11.06% | 9.76% | 9.37% | |
| Adobe Inc. | 27.01% | 30.55% | 40.88% | 26.42% | 28.69% | 23.20% | |
| International Business Machines Corp. | 2.71% | 10.01% | 7.59% | 12.22% | 10.97% | — | |
| Intuit Inc. | 16.23% | 21.41% | 23.78% | 22.95% | 20.31% | — | |
| Microsoft Corp. | 36.69% | 36.45% | 30.96% | 31.18% | 15.02% | — | |
| Oracle Corp. | 15.83% | 33.96% | 25.94% | 28.05% | 9.60% | — | |
| Palo Alto Networks Inc. | -4.85% | -11.72% | -7.83% | -2.82% | -6.51% | — | |
| Salesforce Inc. | 5.45% | 19.16% | 0.74% | 8.36% | 1.22% | — | |
| ServiceNow Inc. | 4.49% | 3.90% | 2.62% | 18.11% | -1.02% | — | |
| Net Profit Margin, Sector | |||||||
| Software & Services | 22.24% | 25.99% | 20.85% | 21.80% | 12.26% | — | |
| Net Profit Margin, Industry | |||||||
| Information Technology | 24.06% | 25.54% | 21.37% | 22.17% | 18.60% | — | |
Based on: 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31).
1 2022 Calculation
Net profit margin = 100 × Net income attributed to Synopsys ÷ Revenue
= 100 × 984,594 ÷ 5,081,542 = 19.38%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Synopsys Inc. net profit margin ratio deteriorated from 2020 to 2021 but then improved from 2021 to 2022 exceeding 2020 level. |
Return on Equity (ROE)
Synopsys Inc., ROE calculation, comparison to benchmarks
| Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | Oct 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income attributed to Synopsys | 984,594) | 757,516) | 664,347) | 532,367) | 432,518) | 136,563) | |
| Total Synopsys stockholders’ equity | 5,515,725) | 5,295,137) | 4,907,404) | 4,083,013) | 3,479,152) | 3,275,620) | |
| Profitability Ratio | |||||||
| ROE1 | 17.85% | 14.31% | 13.54% | 13.04% | 12.43% | 4.17% | |
| Benchmarks | |||||||
| ROE, Competitors2 | |||||||
| Accenture PLC | 31.11% | 30.25% | 30.05% | 33.17% | 39.17% | 38.50% | |
| Adobe Inc. | 33.85% | 32.59% | 39.66% | 28.03% | 27.67% | 20.02% | |
| International Business Machines Corp. | 7.47% | 30.38% | 27.14% | 45.25% | 51.96% | — | |
| Intuit Inc. | 12.57% | 20.89% | 35.76% | 41.53% | 51.44% | — | |
| Microsoft Corp. | 43.68% | 43.15% | 37.43% | 38.35% | 20.03% | — | |
| Oracle Corp. | — | 262.43% | 83.94% | 50.87% | 8.37% | — | |
| Palo Alto Networks Inc. | -127.14% | -78.63% | -24.23% | -5.16% | -15.30% | — | |
| Salesforce Inc. | 2.48% | 9.81% | 0.37% | 7.11% | 1.36% | — | |
| ServiceNow Inc. | 6.46% | 6.22% | 4.18% | 29.45% | -2.40% | — | |
| ROE, Sector | |||||||
| Software & Services | 32.03% | 37.53% | 31.80% | 36.15% | 20.50% | — | |
| ROE, Industry | |||||||
| Information Technology | 38.70% | 42.55% | 35.28% | 36.69% | 30.48% | — | |
Based on: 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31).
1 2022 Calculation
ROE = 100 × Net income attributed to Synopsys ÷ Total Synopsys stockholders’ equity
= 100 × 984,594 ÷ 5,515,725 = 17.85%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Synopsys Inc. ROE improved from 2020 to 2021 and from 2021 to 2022. |
Return on Assets (ROA)
Synopsys Inc., ROA calculation, comparison to benchmarks
| Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | Oct 31, 2018 | Oct 31, 2017 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||
| Net income attributed to Synopsys | 984,594) | 757,516) | 664,347) | 532,367) | 432,518) | 136,563) | |
| Total assets | 9,418,087) | 8,752,260) | 8,030,062) | 6,405,160) | 6,145,974) | 5,396,414) | |
| Profitability Ratio | |||||||
| ROA1 | 10.45% | 8.66% | 8.27% | 8.31% | 7.04% | 2.53% | |
| Benchmarks | |||||||
| ROA, Competitors2 | |||||||
| Accenture PLC | 14.55% | 13.68% | 13.78% | 16.04% | 16.61% | 15.18% | |
| Adobe Inc. | 17.51% | 17.70% | 21.66% | 14.22% | 13.80% | 11.65% | |
| International Business Machines Corp. | 1.29% | 4.35% | 3.58% | 6.20% | 7.07% | — | |
| Intuit Inc. | 7.45% | 13.29% | 16.70% | 24.78% | 23.39% | — | |
| Microsoft Corp. | 19.94% | 18.36% | 14.70% | 13.69% | 6.40% | — | |
| Oracle Corp. | 6.15% | 10.48% | 8.78% | 10.20% | 2.79% | — | |
| Palo Alto Networks Inc. | -2.18% | -4.87% | -2.95% | -1.24% | -2.54% | — | |
| Salesforce Inc. | 1.52% | 6.14% | 0.23% | 3.61% | 0.61% | — | |
| ServiceNow Inc. | 2.44% | 2.13% | 1.36% | 10.41% | -0.69% | — | |
| ROA, Sector | |||||||
| Software & Services | 11.67% | 12.60% | 10.03% | 10.89% | 6.18% | — | |
| ROA, Industry | |||||||
| Information Technology | 15.14% | 15.64% | 12.15% | 12.81% | 10.98% | — | |
Based on: 10-K (reporting date: 2022-10-31), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-31), 10-K (reporting date: 2019-10-31), 10-K (reporting date: 2018-10-31), 10-K (reporting date: 2017-10-31).
1 2022 Calculation
ROA = 100 × Net income attributed to Synopsys ÷ Total assets
= 100 × 984,594 ÷ 9,418,087 = 10.45%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Synopsys Inc. ROA improved from 2020 to 2021 and from 2021 to 2022. |