Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Abbott Laboratories, 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).
The financial performance exhibits several notable trends over the five-year period ending December 31, 2024.
- Gross Profit Margin
- The gross profit margin remained relatively stable, fluctuating slightly between 50.28% and 52.21%. After a peak in 2021 at 52.21%, there was a mild decline in 2023 to 50.28%, followed by a slight increase to 50.93% in 2024. This stability suggests consistent cost management related to production or service delivery.
- Operating Profit Margin
- This margin improved significantly from 15.48% in 2020 to a high of 19.56% in 2021, reflecting enhanced operational efficiency or better control over operating expenses. However, margins declined gradually thereafter, falling to around 16.15% in 2023 and holding steady at 16.27% in 2024, indicating some pressure on operating profitability despite earlier gains.
- Net Profit Margin
- The net profit margin shows a considerable upward inflection in the final year. From a steady range between 12.99% and 16.42% during 2020 to 2023, the margin more than doubled to 31.95% in 2024. This substantial increase may result from extraordinary gains, tax benefits, or significant reductions in non-operating expenses, enhancing overall profitability.
- Return on Equity (ROE)
- ROE rose from 13.71% in 2020 to peak at 19.75% in 2021, followed by a decrease to 14.83% in 2023. A sharp rebound occurred in 2024, reaching 28.12%, aligning with the spike in net profit margin. The trend suggests improving capital efficiency, especially in the latest year, possibly driven by better profit generation relative to shareholder equity.
- Return on Assets (ROA)
- ROA followed a pattern similar to ROE and net profit margin. It increased from 6.2% in 2020 to 9.4% in 2021, remained stable around 9.31% in 2022, then declined moderately to 7.82% in 2023. In 2024, ROA more than doubled to 16.46%, indicating enhanced asset utilization to generate net income over the last year.
Overall, the data indicates stable cost structures with fluctuating operating profitability. The significant improvements in net profit margin, ROE, and ROA in 2024 suggest a turnaround or one-time positive factors that have materially boosted financial returns. Continuous monitoring is advised to confirm the sustainability of these improvements.
Return on Sales
Return on Investment
Gross Profit Margin
Abbott Laboratories, 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 profit | 21,366) | 20,168) | 22,498) | 22,491) | 17,473) | |
| Net sales | 41,950) | 40,109) | 43,653) | 43,075) | 34,608) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 50.93% | 50.28% | 51.54% | 52.21% | 50.49% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| CVS Health Corp. | 13.29% | 14.94% | 16.62% | 17.48% | 18.01% | |
| Elevance Health Inc. | 15.92% | 16.79% | 16.79% | 17.09% | 19.71% | |
| Intuitive Surgical Inc. | 67.46% | 66.39% | 67.44% | 69.32% | 65.65% | |
| Medtronic PLC | 65.34% | 65.67% | 67.98% | 65.19% | 67.41% | |
| UnitedHealth Group Inc. | 21.31% | 23.64% | 24.09% | 23.60% | 25.62% | |
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 profit ÷ Net sales
= 100 × 21,366 ÷ 41,950 = 50.93%
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit exhibited an increasing trend from 2020 to 2021, rising from $17,473 million to $22,491 million. The figure remained relatively stable in 2022 at $22,498 million, followed by a decline in 2023 to $20,168 million. In 2024, a partial recovery is observed with gross profit increasing to $21,366 million. Overall, after an initial upward movement, gross profit showed volatility with a dip in the later years but remained above the 2020 level.
- Net Sales
- Net sales increased significantly between 2020 and 2021, growing from $34,608 million to $43,075 million. This upward trajectory continued slightly into 2022, reaching $43,653 million. However, net sales decreased in 2023 to $40,109 million, before recovering somewhat in 2024 to $41,950 million. The data suggests a period of strong growth at the start, followed by a moderate decline and a slight rebound later.
- Gross Profit Margin
- The gross profit margin rose from 50.49% in 2020 to a peak of 52.21% in 2021, indicating improved profitability relative to sales. Thereafter, the margin gradually decreased to 51.54% in 2022 and further dropped to 50.28% in 2023. In 2024, it marginally recovered to 50.93%. Despite the fluctuations, the margin remained around the 50% mark throughout the period, signifying consistent cost management relative to revenue.
- Summary of Trends
- The financial data indicate that the company experienced robust growth in both gross profit and net sales in the early years, 2020 and 2021. This was accompanied by an improved gross profit margin, suggesting effective revenue generation and cost control. Post-2021, a reversal occurred with declines in both gross profit and net sales in 2023, while gross profit margin also dipped, implying increased cost pressures or pricing challenges. The partial recovery observed in 2024 points toward stabilization efforts, but values have not fully returned to their prior peak levels. The overall picture is one of early strong performance followed by a moderate downturn and subsequent measured recovery in profitability and sales.
Operating Profit Margin
Abbott Laboratories, operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating earnings | 6,825) | 6,478) | 8,362) | 8,425) | 5,357) | |
| Net sales | 41,950) | 40,109) | 43,653) | 43,075) | 34,608) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 16.27% | 16.15% | 19.16% | 19.56% | 15.48% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| CVS Health Corp. | 2.30% | 3.85% | 2.41% | 4.54% | 5.19% | |
| Elevance Health Inc. | 4.16% | 4.47% | 4.94% | 5.15% | 4.97% | |
| Intuitive Surgical Inc. | 28.12% | 24.80% | 25.35% | 31.89% | 24.09% | |
| Medtronic PLC | 15.89% | 17.56% | 18.15% | 14.89% | 16.57% | |
| UnitedHealth Group Inc. | 8.17% | 8.80% | 8.83% | 8.40% | 8.76% | |
| Operating Profit Margin, Sector | ||||||
| Health Care Equipment & Services | 6.10% | 6.93% | 6.76% | 7.44% | 7.51% | |
| Operating Profit Margin, Industry | ||||||
| Health Care | 10.05% | 10.60% | 15.03% | 14.99% | 11.62% | |
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 sales
= 100 × 6,825 ÷ 41,950 = 16.27%
2 Click competitor name to see calculations.
- Operating Earnings
- Operating earnings showed a strong increase from 2020 to 2021, rising from 5,357 million US dollars to 8,425 million US dollars. This level was broadly maintained in 2022 with a slight decline to 8,362 million US dollars. However, there was a notable decrease in 2023, with earnings dropping to 6,478 million US dollars. A mild recovery was observed in 2024, bringing earnings up to 6,825 million US dollars, though still below the peak levels of 2021 and 2022.
- Net Sales
- Net sales exhibited a consistent upward trend from 2020 through 2022, increasing from 34,608 million US dollars to 43,653 million US dollars. This growth trend reversed in 2023, with sales decreasing to 40,109 million US dollars. In 2024, net sales partially rebounded to 41,950 million US dollars, yet remaining below prior peak values.
- Operating Profit Margin
- The operating profit margin improved markedly from 15.48% in 2020 to 19.56% in 2021, indicating increased operational efficiency or profitability. This margin slightly decreased to 19.16% in 2022 but remained relatively high. In 2023, the margin declined more sharply to 16.15%, aligning with the reductions in operating earnings and net sales. A modest increase to 16.27% was seen in 2024, though it did not return to the higher margins recorded in the earlier years.
- Summary
- Across the observed periods, there was a phase of robust growth in operating earnings, net sales, and operating profit margin from 2020 through 2021, sustained partially into 2022. The subsequent years, 2023 and 2024, reflected a downturn with declines in both sales and earnings, alongside reduced profit margins, followed by slight recovery in 2024. The data suggests a cycle of growth and contraction, with recent years indicating challenges affecting profitability and sales volumes.
Net Profit Margin
Abbott Laboratories, 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 | 13,402) | 5,723) | 6,933) | 7,071) | 4,495) | |
| Net sales | 41,950) | 40,109) | 43,653) | 43,075) | 34,608) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 31.95% | 14.27% | 15.88% | 16.42% | 12.99% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| CVS Health Corp. | 1.24% | 2.34% | 1.29% | 2.72% | 2.68% | |
| Elevance Health Inc. | 3.41% | 3.52% | 3.87% | 4.46% | 3.78% | |
| Intuitive Surgical Inc. | 27.81% | 25.24% | 21.25% | 29.85% | 24.33% | |
| Medtronic PLC | 11.36% | 12.03% | 15.90% | 11.97% | 16.56% | |
| UnitedHealth Group Inc. | 3.65% | 6.09% | 6.25% | 6.06% | 6.03% | |
| Net Profit Margin, Sector | ||||||
| Health Care Equipment & Services | 4.34% | 4.93% | 4.95% | 5.52% | 5.26% | |
| Net Profit Margin, Industry | ||||||
| Health Care | 7.02% | 9.24% | 11.62% | 12.42% | 8.45% | |
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 ÷ Net sales
= 100 × 13,402 ÷ 41,950 = 31.95%
2 Click competitor name to see calculations.
- Net earnings
- Net earnings exhibited a generally increasing trend over the observed period, starting at 4,495 million USD in 2020 and rising to 7,071 million USD in 2021. Despite a slight decline to 6,933 million USD in 2022 and a further decrease to 5,723 million USD in 2023, net earnings sharply increased to 13,402 million USD in 2024, nearly doubling the previous year's figure.
- Net sales
- Net sales showed growth from 34,608 million USD in 2020 to a peak of 43,653 million USD in 2022, followed by a decline to 40,109 million USD in 2023. The sales level rebounded slightly to 41,950 million USD in 2024 but remained below the 2022 peak. Overall, net sales trend indicates moderate fluctuations with a peak in the middle years.
- Net profit margin
- The net profit margin increased from 12.99% in 2020 to 16.42% in 2021, then experienced a gradual decline through 2022 and 2023, falling to 14.27%. However, in 2024, the margin surged significantly to 31.95%, more than doubling the margin of prior years, suggesting a substantial improvement in profitability relative to sales.
- Insight
- The data reflect an overall positive performance in profitability in 2024, driven by a marked increase in net earnings paired with a strong improvement in net profit margin, despite net sales not reaching previous peak levels. This suggests enhanced cost management or higher-margin operations. The dip in earnings and margins in 2022 and 2023 contrasts with rising sales through 2022, indicating possible margin pressures during that period.
Return on Equity (ROE)
Abbott Laboratories, 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 | 13,402) | 5,723) | 6,933) | 7,071) | 4,495) | |
| Total Abbott shareholders’ investment | 47,664) | 38,603) | 36,686) | 35,802) | 32,784) | |
| Profitability Ratio | ||||||
| ROE1 | 28.12% | 14.83% | 18.90% | 19.75% | 13.71% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| CVS Health Corp. | 6.11% | 10.91% | 5.84% | 10.54% | 10.35% | |
| Elevance Health Inc. | 14.47% | 15.23% | 16.59% | 16.93% | 13.77% | |
| Intuitive Surgical Inc. | 14.13% | 13.51% | 11.98% | 14.32% | 10.90% | |
| Medtronic PLC | 7.32% | 7.30% | 9.59% | 7.01% | 9.44% | |
| UnitedHealth Group Inc. | 15.55% | 25.22% | 25.87% | 24.09% | 23.52% | |
| ROE, Sector | ||||||
| Health Care Equipment & Services | 13.71% | 15.59% | 15.27% | 15.49% | 14.35% | |
| ROE, Industry | ||||||
| Health Care | 14.75% | 18.50% | 22.94% | 23.78% | 15.95% | |
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 ÷ Total Abbott shareholders’ investment
= 100 × 13,402 ÷ 47,664 = 28.12%
2 Click competitor name to see calculations.
The financial data reveals several significant trends across the observed periods. Overall, the net earnings exhibit substantial variability with periods of growth and decline. Notably, net earnings increased sharply from 4,495 million US dollars in 2020 to 7,071 million US dollars in 2021, followed by a slight decrease to 6,933 million US dollars in 2022. A more pronounced decline occurred in 2023, dropping to 5,723 million US dollars. However, the net earnings rebounded strongly in 2024, reaching a peak of 13,402 million US dollars, which is almost double the level of the previous year.
The total shareholders’ investment shows a consistent upward trajectory throughout the five years analyzed. Starting at 32,784 million US dollars in 2020, this figure increased steadily to 35,802 million in 2021, 36,686 million in 2022, 38,603 million in 2023, and significantly rose to 47,664 million in 2024. This steady increase suggests sustained or growing confidence by investors and possibly capital injections or retained earnings accumulation contributing to equity growth.
The return on equity (ROE) percentage mirrors the fluctuations in net earnings, with some deviations in magnitude. ROE increased from 13.71% in 2020 to 19.75% in 2021, indicating improved profitability relative to equity during that period. It then slightly decreased to 18.9% in 2022 and further declined to 14.83% in 2023, paralleling the dip in net earnings. A remarkable increase occurred in 2024, with ROE rising sharply to 28.12%, reflecting a notably higher efficiency in generating earnings from equity in that year.
- Net Earnings
- Strong growth in 2021, moderate decline in 2022, further reduction in 2023, and significant recovery in 2024.
- Total Shareholders’ Investment
- Consistent and steady increase each year, signaling ongoing equity growth.
- Return on Equity (ROE)
- Improved profitability up to 2021, slight decline in subsequent years, with a notable increase in 2024 indicating enhanced return on equity.
In summary, the data indicate robust overall financial health with stable growth in shareholders’ investment and fluctuating but generally positive earnings performance. The exceptional surge in both net earnings and ROE in the final period analyzed suggests a significant operational improvement or one-time financial event contributing to enhanced profitability and capital efficiency.
Return on Assets (ROA)
Abbott Laboratories, 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 | 13,402) | 5,723) | 6,933) | 7,071) | 4,495) | |
| Total assets | 81,414) | 73,214) | 74,438) | 75,196) | 72,548) | |
| Profitability Ratio | ||||||
| ROA1 | 16.46% | 7.82% | 9.31% | 9.40% | 6.20% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| CVS Health Corp. | 1.82% | 3.34% | 1.82% | 3.39% | 3.11% | |
| Elevance Health Inc. | 5.12% | 5.50% | 5.86% | 6.26% | 5.28% | |
| Intuitive Surgical Inc. | 12.39% | 11.64% | 10.19% | 12.58% | 9.50% | |
| Medtronic PLC | 4.09% | 4.13% | 5.54% | 3.87% | 5.28% | |
| UnitedHealth Group Inc. | 4.83% | 8.18% | 8.19% | 8.15% | 7.81% | |
| ROA, Sector | ||||||
| Health Care Equipment & Services | 5.17% | 5.91% | 5.77% | 6.03% | 5.44% | |
| ROA, Industry | ||||||
| Health Care | 5.25% | 6.71% | 8.71% | 8.70% | 5.45% | |
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 ÷ Total assets
= 100 × 13,402 ÷ 81,414 = 16.46%
2 Click competitor name to see calculations.
The financial data over the five-year period reveals several key trends related to profitability, asset management, and overall financial performance.
- Net Earnings
- The net earnings showed a notable increase from 4,495 million US dollars in 2020 to 7,071 million in 2021, marking a significant improvement. This trend maintained a high level in 2022 at 6,933 million, followed by a decline to 5,723 million in 2023. However, there was a remarkable recovery in 2024 with net earnings reaching 13,402 million, the highest in the period, indicating strong profitability growth in the latest year.
- Total Assets
- Total assets exhibited relative stability from 2020 to 2023, fluctuating slightly around the 72,000 to 75,000 million US dollars range. In 2024, there was a noticeable increase to 81,414 million US dollars, suggesting an expansion in the company's asset base after several years of marginal changes.
- Return on Assets (ROA)
- The ROA percentage followed a pattern consistent with net earnings trends. Starting at 6.2% in 2020, ROA increased substantially to 9.4% in 2021, remaining at a similar level of 9.31% in 2022. It then declined to 7.82% in 2023 before more than doubling to 16.46% in 2024. This increase in 2024 reflects improved efficiency in utilizing assets to generate earnings despite a rise in total assets.
Overall, the data suggests that while total assets remained mostly stable in the early years, the company achieved significant improvements in profitability and asset efficiency, particularly in the year 2024. The sharp increases in net earnings and ROA in the final year could be indicative of successful strategic initiatives or market conditions enhancing financial performance.