Microsoft Excel LibreOffice Calc

Walgreens Boots Alliance Inc. (WBA)

Analysis of Profitability Ratios

Difficulty: Beginner

Profitability ratios measure the company’s ability to generate profitable sales from its resources (assets).

Profitability Ratios (Summary)

Walgreens Boots Alliance Inc., profitability ratios

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Return on Sales
Gross profit margin 23.41% 24.67% 25.46% 26.03% 28.23% 29.24%
Operating profit margin 4.88% 4.70% 5.11% 4.51% 5.49% 5.46%
Net profit margin 3.82% 3.45% 3.56% 4.08% 2.53% 3.39%
Return on Investment
Return on equity (ROE) 19.32% 14.85% 13.97% 13.67% 9.44% 12.59%
Return on assets (ROA) 7.37% 6.18% 5.74% 6.14% 5.20% 6.91%

Based on: 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20), 10-K (filing date: 2013-10-21).

Profitability ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Walgreens Boots Alliance Inc.’s gross profit margin ratio deteriorated from 2016 to 2017 and from 2017 to 2018.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Walgreens Boots Alliance Inc.’s operating profit margin ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Walgreens Boots Alliance Inc.’s net profit margin ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.
Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Walgreens Boots Alliance Inc.’s ROE improved from 2016 to 2017 and from 2017 to 2018.
ROA A profitability ratio calculated as net income divided by total assets. Walgreens Boots Alliance Inc.’s ROA improved from 2016 to 2017 and from 2017 to 2018.

Gross Profit Margin

Walgreens Boots Alliance Inc., gross profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Gross profit 30,792  29,162  29,874  26,924  21,569  21,119 
Sales 131,537  118,214  117,351  103,444  76,392  72,217 
Profitability Ratio
Gross profit margin1 23.41% 24.67% 25.46% 26.03% 28.23% 29.24%
Benchmarks
Gross Profit Margin, Competitors2
CVS Health Corp. 15.92% 15.45% 16.26% 17.31% 18.20% —

Based on: 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Gross profit margin = 100 × Gross profit ÷ Sales
= 100 × 30,792 ÷ 131,537 = 23.41%

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. Walgreens Boots Alliance Inc.’s gross profit margin ratio deteriorated from 2016 to 2017 and from 2017 to 2018.

Operating Profit Margin

Walgreens Boots Alliance Inc., operating profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Operating income 6,414  5,557  6,001  4,668  4,194  3,940 
Sales 131,537  118,214  117,351  103,444  76,392  72,217 
Profitability Ratio
Operating profit margin1 4.88% 4.70% 5.11% 4.51% 5.49% 5.46%
Benchmarks
Operating Profit Margin, Competitors2
CVS Health Corp. 2.07% 5.15% 5.84% 6.18% 6.31% —
Operating Profit Margin, Sector
Food & Drug Retailers 3.21% 4.98% 5.55% 5.51% 6.02% —
Operating Profit Margin, Industry
Consumer Services 8.01% 8.35% 8.49% 8.65% 8.19% —

Based on: 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Operating profit margin = 100 × Operating income ÷ Sales
= 100 × 6,414 ÷ 131,537 = 4.88%

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. Walgreens Boots Alliance Inc.’s operating profit margin ratio deteriorated from 2016 to 2017 but then slightly improved from 2017 to 2018.

Net Profit Margin

Walgreens Boots Alliance Inc., net profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 5,024  4,078  4,173  4,220  1,932  2,450 
Sales 131,537  118,214  117,351  103,444  76,392  72,217 
Profitability Ratio
Net profit margin1 3.82% 3.45% 3.56% 4.08% 2.53% 3.39%
Benchmarks
Net Profit Margin, Competitors2
CVS Health Corp. -0.31% 3.58% 3.00% 3.42% 3.33% —
Net Profit Margin, Sector
Food & Drug Retailers 1.36% 3.53% 3.22% 3.68% 3.05% —
Net Profit Margin, Industry
Consumer Services 5.21% 6.13% 5.59% 4.91% 4.57% —

Based on: 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20), 10-K (filing date: 2013-10-21).

1 2018 Calculation
Net profit margin = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Sales
= 100 × 5,024 ÷ 131,537 = 3.82%

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. Walgreens Boots Alliance Inc.’s net profit margin ratio deteriorated from 2016 to 2017 but then improved from 2017 to 2018 exceeding 2016 level.

Return on Equity (ROE)

Walgreens Boots Alliance Inc., ROE calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 5,024  4,078  4,173  4,220  1,932  2,450 
Total Walgreens Boots Alliance, Inc. shareholders’ equity 26,007  27,466  29,880  30,861  20,457  19,454 
Profitability Ratio
ROE1 19.32% 14.85% 13.97% 13.67% 9.44% 12.59%
Benchmarks
ROE, Competitors2
CVS Health Corp. -1.02% 17.57% 14.44% 14.08% 12.23% —
ROE, Sector
Food & Drug Retailers 5.26% 16.42% 14.23% 13.90% 11.26% —
ROE, Industry
Consumer Services 22.00% 25.70% 22.46% 20.77% 17.69% —

Based on: 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20), 10-K (filing date: 2013-10-21).

1 2018 Calculation
ROE = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total Walgreens Boots Alliance, Inc. shareholders’ equity
= 100 × 5,024 ÷ 26,007 = 19.32%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders’ equity. Walgreens Boots Alliance Inc.’s ROE improved from 2016 to 2017 and from 2017 to 2018.

Return on Assets (ROA)

Walgreens Boots Alliance Inc., ROA calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Aug 31, 2018 Aug 31, 2017 Aug 31, 2016 Aug 31, 2015 Aug 31, 2014 Aug 31, 2013
Selected Financial Data (US$ in millions)
Net earnings attributable to Walgreens Boots Alliance, Inc. 5,024  4,078  4,173  4,220  1,932  2,450 
Total assets 68,124  66,009  72,688  68,782  37,182  35,481 
Profitability Ratio
ROA1 7.37% 6.18% 5.74% 6.14% 5.20% 6.91%
Benchmarks
ROA, Competitors2
CVS Health Corp. -0.30% 6.96% 5.63% 5.59% 6.25% —
ROA, Sector
Food & Drug Retailers 1.67% 6.64% 5.68% 5.82% 5.90% —
ROA, Industry
Consumer Services 6.25% 8.02% 7.28% 6.91% 6.46% —

Based on: 10-K (filing date: 2018-10-11), 10-K (filing date: 2017-10-25), 10-K (filing date: 2016-10-20), 10-K (filing date: 2015-10-28), 10-K (filing date: 2014-10-20), 10-K (filing date: 2013-10-21).

1 2018 Calculation
ROA = 100 × Net earnings attributable to Walgreens Boots Alliance, Inc. ÷ Total assets
= 100 × 5,024 ÷ 68,124 = 7.37%

2 Click competitor name to see calculations.

Profitability ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Walgreens Boots Alliance Inc.’s ROA improved from 2016 to 2017 and from 2017 to 2018.