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)
Abbott Laboratories, profitability ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
The profitability metrics demonstrate a period of fluctuation between 2021 and 2025. Initial declines in several key ratios are followed by a significant peak in 2024, then a partial reversion towards earlier levels in 2025. This suggests potential non-recurring factors influenced the 2024 results.
- Gross Profit Margin
- The gross profit margin experienced a gradual decline from 52.21% in 2021 to 50.28% in 2023. A slight recovery to 50.93% occurred in 2024, followed by a more substantial increase to 52.62% in 2025. This indicates improving cost of goods sold management or pricing power towards the end of the period.
- Operating Profit Margin
- Similar to the gross profit margin, the operating profit margin decreased from 19.56% in 2021 to 16.15% in 2023. A modest improvement to 16.27% was seen in 2024, with a further increase to 18.17% in 2025. This suggests that while operating expenses were initially impacting profitability, they were better controlled in the later years.
- Net Profit Margin
- The net profit margin followed a declining trend from 16.42% in 2021 to 14.27% in 2023. A dramatic increase to 31.95% occurred in 2024, significantly outpacing the changes in gross and operating margins. This suggests a substantial impact from non-operating items, such as gains from asset sales or tax benefits, in 2024. The margin then decreased considerably to 14.72% in 2025, indicating the absence of these factors.
- Return on Equity (ROE)
- ROE mirrored the pattern of the net profit margin, decreasing from 19.75% in 2021 to 14.83% in 2023. A substantial rise to 28.12% was observed in 2024, coinciding with the peak in net profit margin, and then a sharp decline to 12.51% in 2025. This indicates a strong correlation between ROE and the influence of non-operating items on net income.
- Return on Assets (ROA)
- ROA also exhibited a decline from 9.40% in 2021 to 7.82% in 2023. It increased to 16.46% in 2024, again aligning with the net profit margin peak, and subsequently decreased to 7.52% in 2025. This suggests that the company’s efficiency in utilizing its assets to generate profit was significantly impacted by the factors affecting net income in 2024.
In summary, the period under review demonstrates a general trend of declining profitability from 2021 to 2023, followed by a pronounced, but potentially unsustainable, improvement in 2024, and a partial reversal in 2025. The significant divergence in 2024 suggests the need for further investigation into the specific factors driving the exceptional net profit margin, ROE, and ROA figures for that year.
Return on Sales
Return on Investment
Gross Profit Margin
Abbott Laboratories, gross profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited a generally stable pattern over the five-year period, with some fluctuation. Initial values demonstrated a slight decrease followed by a recovery towards the end of the period.
- Gross Profit Margin Trend
- In 2021, the gross profit margin stood at 52.21%. A modest decline was observed in 2022, with the margin decreasing to 51.54%. This downward trend continued into 2023, reaching a low of 50.28%. A slight improvement occurred in 2024, with the margin rising to 50.93%. The most significant increase occurred in 2025, with the gross profit margin reaching 52.62%, surpassing the 2021 level.
The gross profit itself showed a similar pattern of initial stability, a dip in 2023, and subsequent recovery. However, the gross profit margin’s movement suggests changes in the cost of goods sold relative to net sales. The increase in margin in 2025, despite an increase in net sales, indicates improved efficiency in managing production costs or increased pricing power.
- Relationship to Net Sales
- Net sales increased from US$43,075 million in 2021 to US$44,328 million in 2025. While net sales generally trended upward, the gross profit margin did not consistently follow. The dip in gross profit margin in 2023 coincided with a decrease in net sales, suggesting potential pressure on both sales volume and profitability. The recovery in both gross profit and margin in 2024 and 2025 indicates a successful response to these earlier challenges.
Overall, the gross profit margin demonstrates resilience, with a return to levels exceeding those observed at the beginning of the period. The fluctuations suggest sensitivity to factors impacting both revenue generation and production costs.
Operating Profit Margin
Abbott Laboratories, operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating earnings | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Operating Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Operating profit margin = 100 × Operating earnings ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited fluctuations over the five-year period. Initial values were strong, followed by a decline, and then a recovery towards the end of the observed timeframe. A detailed examination of the trends is presented below.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 19.56% in 2021, decreased to a low of 16.15% in 2023, and then increased to 18.17% in 2025. This indicates a period of margin compression followed by a subsequent recovery.
- Operating Profit Margin - 2021 to 2022
- From 2021 to 2022, the operating profit margin experienced a slight decrease, moving from 19.56% to 19.16%. This suggests a modest reduction in profitability from operations during this period, despite a small increase in net sales.
- Operating Profit Margin - 2022 to 2023
- A more significant decline in the operating profit margin was observed between 2022 and 2023, falling from 19.16% to 16.15%. This coincided with a decrease in net sales, indicating that the reduction in sales had a substantial negative impact on operational profitability. Operating earnings also decreased during this period.
- Operating Profit Margin - 2023 to 2025
- The operating profit margin demonstrated improvement from 2023 to 2025. It increased from 16.15% in 2023 to 16.27% in 2024 and further to 18.17% in 2025. This recovery occurred alongside an increase in both net sales and operating earnings, suggesting improved operational efficiency and/or pricing power.
- Relationship to Operating Earnings and Net Sales
- The operating profit margin’s movements are closely correlated with changes in both operating earnings and net sales. The decline in 2023 aligns with decreases in both metrics, while the recovery in 2024 and 2025 corresponds with increases in both. This suggests that the company’s ability to generate profit from its core operations is directly influenced by its sales volume and its efficiency in controlling operating costs.
In conclusion, the operating profit margin experienced a period of volatility, with a notable dip in 2023 followed by a recovery. The trend appears to be linked to fluctuations in net sales and operating earnings, highlighting the importance of both revenue generation and cost management for maintaining profitability.
Net Profit Margin
Abbott Laboratories, net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Health Care Equipment & Services | ||||||
| Net Profit Margin, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited considerable fluctuation over the five-year period. Initial values demonstrated a generally stable, though slightly decreasing, trend before a significant surge followed by a return towards earlier levels.
- Overall Trend
- From 2021 to 2023, the net profit margin experienced a gradual decline. This decreased from 16.42% in 2021 to 14.27% in 2023. However, 2024 witnessed a substantial increase to 31.95%, representing a marked improvement in profitability. This high margin was not sustained, as it decreased to 14.72% in 2025, approaching the levels observed in 2023.
- Year-over-Year Changes
- The period between 2022 and 2023 saw a decrease in net profit margin of 1.54 percentage points. The most dramatic change occurred between 2023 and 2024, with an increase of 17.68 percentage points. Subsequently, a decrease of 17.23 percentage points was observed between 2024 and 2025.
- Relationship to Net Sales and Earnings
- Net sales decreased from 2022 to 2023, while net earnings also declined. The substantial increase in net profit margin in 2024 coincided with a modest increase in net sales and a significant increase in net earnings. The decline in net profit margin in 2025 occurred alongside an increase in net sales, but a decrease in net earnings. This suggests that earnings growth is a primary driver of the net profit margin fluctuations, with sales playing a secondary role.
- Volatility
- The net profit margin demonstrates a high degree of volatility, particularly when considering the large swing between 2023, 2024, and 2025. This suggests that the company’s profitability is sensitive to changes in earnings and potentially susceptible to external factors impacting cost of goods sold or operating expenses.
Return on Equity (ROE)
Abbott Laboratories, ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Total Abbott shareholders’ investment | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| ROE, Sector | ||||||
| Health Care Equipment & Services | ||||||
| ROE, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
ROE = 100 × Net earnings ÷ Total Abbott shareholders’ investment
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited considerable fluctuation over the five-year period. Initial values demonstrated a strong performance, followed by a period of decline, a significant surge, and a subsequent decrease.
- Overall Trend
- The ROE began at 19.75% in 2021, decreased to 14.83% in 2023, then experienced a substantial increase to 28.12% in 2024, before falling to 12.51% in 2025. This pattern indicates volatility in the company’s profitability relative to shareholder equity.
- Net Earnings Impact
- Net earnings decreased from US$7,071 million in 2021 to US$5,723 million in 2023, coinciding with the initial decline in ROE. The substantial increase in net earnings to US$13,402 million in 2024 directly contributed to the peak ROE observed in that year. The subsequent decrease in net earnings to US$6,524 million in 2025 then corresponded with the decline in ROE.
- Shareholder Equity Impact
- Total Abbott shareholders’ investment consistently increased throughout the period, rising from US$35,802 million in 2021 to US$52,130 million in 2025. This continuous growth in equity partially offset the impact of fluctuating net earnings on ROE. The larger equity base in later years required higher net earnings to maintain equivalent ROE levels.
- Year-over-Year Changes
- The largest year-over-year increase in ROE occurred between 2023 and 2024, driven by a significant rise in net earnings. Conversely, the most substantial decrease in ROE was observed between 2024 and 2025, primarily due to a considerable reduction in net earnings despite continued growth in shareholder equity.
The observed fluctuations in ROE suggest that the company’s profitability is sensitive to changes in net earnings, and that the increasing equity base is moderating the impact of those earnings changes on returns to shareholders.
Return on Assets (ROA)
Abbott Laboratories, ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Elevance Health Inc. | ||||||
| Intuitive Surgical Inc. | ||||||
| Medtronic PLC | ||||||
| UnitedHealth Group Inc. | ||||||
| ROA, Sector | ||||||
| Health Care Equipment & Services | ||||||
| ROA, Industry | ||||||
| Health Care | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited considerable fluctuation over the five-year period. Initial values demonstrated relative stability, followed by a significant increase and subsequent decline.
- Overall Trend
- The ROA began at 9.40% in 2021 and decreased slightly to 9.31% in 2022. A substantial increase was then observed in 2024, reaching 16.46%, before falling back to 7.52% in 2025. This pattern indicates a period of strong performance in 2024 that was not sustained into the following year.
- Net Earnings Impact
- Net earnings decreased from US$7,071 million in 2021 to US$5,723 million in 2023. However, a dramatic rise to US$13,402 million occurred in 2024, directly contributing to the peak in ROA. The subsequent decrease in net earnings to US$6,524 million in 2025 partially explains the decline in ROA that year.
- Asset Base Impact
- Total assets experienced a modest decrease between 2021 and 2023, moving from US$75,196 million to US$73,214 million. A notable increase in total assets to US$81,414 million in 2024 coincided with the peak in ROA. Further asset growth to US$86,713 million in 2025, coupled with lower net earnings, contributed to the ROA decrease.
The significant jump in ROA in 2024 appears to be driven by a combination of substantially increased net earnings and a growing asset base. The subsequent decline in 2025 suggests that while the asset base continued to expand, earnings did not keep pace, resulting in a lower return on those assets.