Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Selected Financial Data since 2012
- Net Profit Margin since 2012
- Return on Assets (ROA) since 2012
- Price to Earnings (P/E) since 2012
- Analysis of Revenues
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Profitability Ratios (Summary)
AbbVie Inc., 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 demonstrated a generally positive trend with fluctuations over the five-year period. It increased from 66.41% in 2020 to a peak of 70% in 2022, indicating improved efficiency in production or cost control. However, it declined significantly to 62.42% in 2023 before recovering to 69.99% in 2024, suggesting some volatility possibly due to changing cost structures or sales mix.
- Operating Profit Margin
- The operating profit margin showed notable variability and an overall downward trend in recent years. Starting at 24.81% in 2020, it rose sharply to nearly 32% in 2021 and remained relatively stable at 31.21% in 2022. However, it fell markedly in 2023 to 23.49%, continuing to decrease further to 16.22% in 2024. This decline may reflect increased operating expenses, competitive pressures, or investment in non-operating activities affecting operating profitability.
- Net Profit Margin
- Net profitability improved significantly from 10.08% in 2020 to approximately 20.5% in 2021 and 2022, indicating strong bottom-line performance during this interval. Nevertheless, a sharp reduction occurred in 2023, with net margin declining to 8.95%, and a further decrease to 7.59% in 2024. This downward trend may be due to increased costs, higher interest expenses, tax impacts, or other non-operational factors adversely influencing net income.
- Return on Equity (ROE)
- Return on equity exhibited considerable fluctuation, starting from 35.3% in 2020, then dramatically rising to 74.91% in 2021 and slightly declining to 68.6% in 2022. It experienced a reduction in 2023 to 46.94%, followed by a substantial surge to an exceptionally high 128.66% in 2024. Such large variations in ROE could indicate changes in financial leverage, profitability, or equity base adjustments impacting shareholder returns.
- Return on Assets (ROA)
- The return on assets showed moderate growth from a low base of 3.07% in 2020 to 8.53% in 2022, reflecting enhanced asset utilization or improved operational efficiency. However, it then declined sharply to 3.61% in 2023 and further decreased to 3.17% in 2024, suggesting that asset profitability weakened significantly in the latter years, potentially due to increased asset base or declining net income relative to assets.
Return on Sales
Return on Investment
Gross Profit Margin
AbbVie Inc., 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 | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
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 ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Revenues
- Net revenues demonstrated a generally increasing trend over the observed five-year period, rising from 45,804 million USD in 2020 to 56,334 million USD in 2024. There was a peak in 2022 at 58,054 million USD, followed by a decline in 2023 to 54,318 million USD, before rebounding in 2024.
- Gross Margin
- Gross margin fluctuated during the period, increasing significantly from 30,417 million USD in 2020 to a peak of 40,640 million USD in 2022. This was followed by a notable decline in 2023 to 33,903 million USD, and then a recovery to 39,430 million USD in 2024. The pattern of gross margin largely parallels the fluctuations seen in net revenues.
- Gross Profit Margin Percentage
- The gross profit margin percentage shows a series of fluctuations rather than a steady trend. It improved from 66.41% in 2020 to 70.00% in 2022, indicating enhanced profitability relative to sales during this period. However, in 2023 there was a sharp decline to 62.42%, suggesting either increased costs or decreased pricing power. The margin recovered strongly in 2024 to 69.99%, nearly reaching the peak level observed in 2022.
- Overall Insights
- The data reflect a period of growth interrupted by a contraction in 2023 affecting both revenues and profitability. The recovery in 2024 suggests successful management actions or favorable market conditions restoring both top-line sales and profitability levels near prior highs. The gross profit margin volatility indicates underlying changes in cost structure or pricing strategies impacting profitability despite fairly stable revenue levels.
Operating Profit Margin
AbbVie Inc., 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 earnings | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Operating Profit Margin, Industry | ||||||
| Health Care | ||||||
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 earnings ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating earnings
- There is a significant increase in operating earnings from 2020 to 2021, rising from 11,363 million USD to 17,924 million USD. This level is maintained in 2022 with a slight increase to 18,117 million USD. However, in 2023, operating earnings decrease sharply to 12,757 million USD and continue to decline to 9,137 million USD in 2024, indicating a downward trend in profitability after 2022.
- Net revenues
- Net revenues show a steady upward trend from 45,804 million USD in 2020 to 56,197 million USD in 2021, and a further increase to 58,054 million USD in 2022. In 2023, revenues decline modestly to 54,318 million USD but recover somewhat in 2024, reaching 56,334 million USD. Overall, net revenues have grown since 2020 despite a dip in 2023.
- Operating profit margin
- The operating profit margin improved substantially from 24.81% in 2020 to a peak of 31.89% in 2021, remaining relatively high at 31.21% in 2022. However, following this period, there is a marked decline in profitability ratios, dropping to 23.49% in 2023 and further to 16.22% in 2024. This reflects a deterioration in operational efficiency or increased costs relative to revenue in the latter years.
- Summary
- The data reveal an initial phase of growth and improved profitability between 2020 and 2022, characterized by increased net revenues, rising operating earnings, and peak operating profit margins. After 2022, despite net revenues remaining relatively stable with a slight recovery in 2024, the company faces considerable challenges as indicated by the significant decreases in operating earnings and profit margin, suggesting increased pressure on profitability. This decline may be attributable to higher operational costs, pricing pressures, or other unfavorable business conditions impacting earnings efficiency.
Net Profit Margin
AbbVie Inc., 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 earnings attributable to AbbVie Inc. | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| Net Profit Margin, Industry | ||||||
| Health Care | ||||||
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 earnings attributable to AbbVie Inc. ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net earnings attributable to AbbVie Inc.
- The net earnings exhibited significant fluctuation over the observed periods. Starting at 4,616 million USD in 2020, there was a substantial increase to 11,542 million USD in 2021, followed by a slight further increase to 11,836 million USD in 2022. However, these gains were not sustained, as earnings sharply declined to 4,863 million USD in 2023 and further decreased to 4,278 million USD in 2024. This pattern indicates a period of strong profitability that was not maintained in the later years.
- Net revenues
- Net revenues showed an overall positive trend with some volatility. Revenues increased from 45,804 million USD in 2020 to 56,197 million USD in 2021, followed by a smaller increase to 58,054 million USD in 2022. Subsequently, revenues declined to 54,318 million USD in 2023 but saw a recovery to 56,334 million USD in 2024. Despite the fluctuations, revenues have generally trended higher over the five-year period.
- Net profit margin
- The net profit margin followed a similar pattern to net earnings, reflecting the company's profitability relative to its revenues. The margin doubled from 10.08% in 2020 to 20.54% in 2021, with a slight decrease to 20.39% in 2022. A sharp decline occurred thereafter, with the margin dropping to 8.95% in 2023 and further down to 7.59% in 2024. This indicates a marked reduction in profitability despite revenue fluctuations, suggesting rising costs or other operational challenges impacting net income.
Return on Equity (ROE)
AbbVie Inc., 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 earnings attributable to AbbVie Inc. | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| ROE, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| ROE, Industry | ||||||
| Health Care | ||||||
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 earnings attributable to AbbVie Inc. ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data demonstrates substantial fluctuations in key profitability and equity indicators across the five-year period. Net earnings attributable to the company exhibited an initial significant increase from 4,616 million US dollars in 2020 to a peak of 11,836 million US dollars in 2022. However, this was followed by a sharp decline in the subsequent two years, with earnings dropping to 4,278 million US dollars by the end of 2024, a level even lower than the initial 2020 figure.
Stockholders’ equity showed a generally increasing trend from 2020 through 2022, rising from 13,076 million US dollars to 17,254 million US dollars, suggesting expansion in the equity base during this period. However, a pronounced contraction occurred thereafter, with equity decreasing drastically to 3,325 million US dollars in 2024, indicating potential equity erosion or significant capital restructuring.
Return on equity (ROE) percentages reveal high variability, with exceptionally high returns noted in 2021 and 2024. The ROE rose from 35.3% in 2020 to an elevated 74.91% in 2021, then slightly declined to 68.6% in 2022. In 2023, it decreased further to 46.94% but surged dramatically to 128.66% in 2024. The very high ROE in 2024, despite considerably lower net earnings and shareholder equity, suggests increased profitability efficiency or potentially leverage effects due to the diminished equity base.
Overall, the data points to a phase of growth and earnings improvement until 2022, followed by significant declines in net earnings and equity in the final years. The ROE volatility and the extreme figures in 2024 highlight substantial shifts in the company’s financial structure and profitability dynamics that could warrant further investigation into underlying causes such as asset write-downs, capital changes, or operational impacts.
Return on Assets (ROA)
AbbVie Inc., 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 earnings attributable to AbbVie Inc. | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| Danaher Corp. | ||||||
| Eli Lilly & Co. | ||||||
| Gilead Sciences Inc. | ||||||
| Johnson & Johnson | ||||||
| Merck & Co. Inc. | ||||||
| Pfizer Inc. | ||||||
| Regeneron Pharmaceuticals Inc. | ||||||
| Thermo Fisher Scientific Inc. | ||||||
| Vertex Pharmaceuticals Inc. | ||||||
| ROA, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | ||||||
| ROA, Industry | ||||||
| Health Care | ||||||
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 earnings attributable to AbbVie Inc. ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net earnings attributable to AbbVie Inc.
- The net earnings showed a significant increase from 2020 to 2022, rising from $4,616 million to $11,836 million. However, in the following years, there was a marked decline, with earnings dropping to $4,863 million in 2023 and further to $4,278 million in 2024, approaching levels similar to those in 2020.
- Total assets
- Total assets exhibited a gradual downward trend over the observed period. Starting at $150,565 million in 2020, total assets decreased each year until 2023, reaching $134,711 million. In 2024, there was a slight increase, ending at $135,161 million, but this figure remained well below the initial level in 2020.
- Return on Assets (ROA)
- ROA followed a pattern similar to that of net earnings. It increased steadily from 3.07% in 2020 to a peak of 8.53% in 2022, indicating enhanced asset profitability during this period. Subsequently, ROA declined sharply to 3.61% in 2023 and further to 3.17% in 2024, reflecting a reduction in the company's ability to generate returns from its assets.
- Overall Analysis
- The data reveals a peak in profitability around 2022, with both net earnings and ROA reaching their highest levels. After 2022, there is a consistent downturn in earnings and profitability ratios, despite a relatively stable asset base with a slight decrease over time. This trend may indicate challenges in maintaining earnings growth or efficiency in asset utilization in the most recent years.