Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Income Statement
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
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Profitability Ratios (Summary)
Altria Group Inc., profitability ratios
Based on: 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), 10-K (reporting date: 2019-12-31).
- Gross Profit Margin
- The gross profit margin exhibited a consistent upward trend over the analyzed period. Starting at 50.62% in 2019, it experienced a slight dip in 2020 to 49.8%, followed by steady increases reaching 58.34% by the end of 2023. This indicates improving efficiency at the production or procurement level and potentially favorable pricing or cost management strategies.
- Operating Profit Margin
- The operating profit margin remained relatively stable between 2019 and 2020, increasing marginally from 41.12% to 41.57%. It then showed a progressive increase over the next three years, peaking at 47.49% in 2022 and slightly declining to 47.16% in 2023. The overall upward trajectory signals enhanced operational performance and controlled operating expenses.
- Net Profit Margin
- The net profit margin exhibited significant volatility. It started negative at -5.15% in 2019, improved sharply to 17.08% in 2020, then declined to 9.51% in 2021. Subsequently, there was a strong recovery in 2022 and 2023, with net margin rising to 22.97% and further to 33.21%, respectively. These fluctuations may be influenced by non-operating items, tax considerations, or extraordinary charges impacting net income beyond operating results.
- Return on Equity (ROE)
- The available data indicates an extremely volatile ROE, with a negative figure of -20.78% in 2019 followed by a sharp positive spike to 157.34% in 2020. No data was provided for subsequent years, limiting trend analysis beyond 2020. The volatility suggests significant changes in net income or equity base which may be related to extraordinary events or financial restructuring.
- Return on Assets (ROA)
- The return on assets showed a steady improvement throughout the period. Starting at -2.62% in 2019, it shifted to positive territory in 2020 at 9.42%, then slightly decreased to 6.26% in 2021. Afterward, it increased substantially to 15.6% in 2022 and 21.08% in 2023. This positive trend reflects more effective utilization of assets to generate profits over time.
Return on Sales
Return on Investment
Gross Profit Margin
Altria Group Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit showed a steady increase from 2019 to 2022, rising from 12,711 million USD in 2019 to 14,246 million USD in 2022. In 2023, the gross profit slightly increased further to 14,284 million USD, indicating a plateau in growth after several years of consistent upward movement.
- Net Revenues
- Net revenues peaked in 2020 at 26,153 million USD, followed by a gradual decline over the subsequent three years. By 2023, net revenues decreased to 24,483 million USD, falling below the 2019 level. This trend suggests a reduction in sales or revenue-generating activities during this period.
- Gross Profit Margin
- The gross profit margin exhibited a consistent upward trajectory from 2019 to 2023. Starting at 50.62% in 2019, the margin decreased slightly to 49.8% in 2020 but then rebounded and progressively increased each year to reach 58.34% in 2023. This improvement implies enhanced operational efficiency or better cost management despite declining revenues.
- Overall Analysis
- While net revenues declined after 2020, the company managed to increase its gross profit and substantially improve gross profit margin over the period. This indicates a focus on cost control or a shift toward higher-margin products or services, enabling the company to maintain profitability despite revenue challenges. The leveling off of gross profit growth in the most recent year suggests potential limits to margin improvements or stability in cost structures.
Operating Profit Margin
Altria Group Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Operating Profit Margin, Industry | ||||||
| Consumer Staples | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Operating income ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several notable trends and changes in performance metrics.
- Operating Income
- The operating income demonstrates a generally increasing trend from 2019 to 2022, rising from 10,326 million US dollars in 2019 to a peak of 11,919 million US dollars in 2022. However, in 2023, there is a slight decline to 11,547 million US dollars, indicating a minor reduction in operating earnings after four consecutive years of growth.
- Net Revenues
- Net revenues show some variability throughout the period. Revenues increased from 25,110 million US dollars in 2019 to a high of 26,153 million US dollars in 2020, followed by a slight decline to 26,013 million US dollars in 2021. From 2021 onwards, revenues steadily decreased to 24,096 million US dollars in 2022 and further to 24,483 million US dollars in 2023. This downward trend in net revenues in the last two years contrasts with the earlier period.
- Operating Profit Margin
- The operating profit margin exhibits a consistent upward trend throughout the five-year span. Starting at 41.12% in 2019, it increases slightly to 41.57% in 2020, then experiences significant growth, reaching 44.44% in 2021 and further rising to 47.49% in 2022. In 2023, the margin remains relatively stable at 47.16%, slightly lower than the previous year but still substantially higher compared to 2019 levels.
In summary, while net revenues show a downward trend in the most recent years, operating income remains strong albeit with a slight dip in 2023 after consistent increases. The operating profit margin has improved significantly over the period, indicating enhanced operational efficiency or better cost management despite fluctuations in net revenues. This divergence suggests the company may be improving profitability through factors other than revenue growth, such as cost control or higher-margin products.
Net Profit Margin
Altria Group Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings (losses) attributable to Altria | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Net Profit Margin, Industry | ||||||
| Consumer Staples | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net earnings (losses) attributable to Altria ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings (Losses) Attributable to Altria
- The net earnings exhibit a significant upward trend over the analyzed period. Starting with a loss of $-1,293 million in 2019, the figure improved dramatically in 2020 to a positive $4,467 million. Although there was a decline in earnings in 2021 to $2,475 million, the amount rebounded strongly in subsequent years, reaching $5,764 million in 2022 and further increasing to $8,130 million by the end of 2023. This pattern suggests recovery and robust profitability growth following an initial loss year.
- Net Revenues
- Net revenues show a relatively stable but slightly declining pattern during the period. Revenues increased marginally from $25,110 million in 2019 to $26,153 million in 2020, then remained virtually flat in 2021 at $26,013 million. However, a gradual decrease commenced in 2022 and continued into 2023, with revenues falling to $25,096 million and then to $24,483 million, respectively. The decline in revenues in the latter years contrasts with the increase in net earnings.
- Net Profit Margin
- The net profit margin shows notable fluctuations, reflecting changes in profitability efficiency. The margin was negative at -5.15% in 2019, corresponding with the net loss recorded that year. It improved significantly in 2020 to 17.08%, indicating a strong recovery in profitability. After a drop to 9.51% in 2021, the margin increased markedly in 2022 and reached a peak of 33.21% in 2023. This escalating profit margin demonstrates increasing financial efficiency and enhanced cost management or higher-margin operations in recent years.
- Overall Analysis
- The financial data reveal a company that overcame a loss position in 2019 with consistent improvements in profitability thereafter. Despite a slight decline in net revenues in the last two years, the company successfully increased its net earnings and drastically improved its profit margins. This indicates effective management of costs and possibly a shift towards higher-margin products or services. The divergence between revenue and earnings growth suggests that factors other than top-line growth, such as improved operational leverage or reduced expenses, contributed significantly to enhanced profitability.
Return on Equity (ROE)
Altria Group Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings (losses) attributable to Altria | ||||||
| Stockholders’ equity (deficit) attributable to Altria | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| ROE, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| ROE, Industry | ||||||
| Consumer Staples | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net earnings (losses) attributable to Altria ÷ Stockholders’ equity (deficit) attributable to Altria
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings (Losses) Attributable to Altria (US$ in millions)
- The company experienced significant fluctuations in net earnings over the five-year period. In 2019, the net earnings reflected a loss of approximately 1.3 billion USD. This reversed sharply in 2020, with net earnings rising to 4.5 billion USD. Although there was a decline in 2021, earnings remained positive at around 2.5 billion USD. The upward trend resumed in 2022 and 2023, with net earnings increasing to 5.8 billion USD and 8.1 billion USD, respectively. Overall, the period shows recovery from losses to strong profitability, especially evident in the last two years.
- Stockholders’ Equity (Deficit) Attributable to Altria (US$ in millions)
- Stockholders’ equity exhibited a declining trend, moving from a positive balance of 6.2 billion USD in 2019 to a significantly negative equity position starting in 2021. The deficit was recorded at 1.6 billion USD in 2021, worsening further to approximately 4.0 billion USD in 2022, before slightly improving but still negative at 3.5 billion USD in 2023. This shift from equity to deficit indicates a deterioration in the company’s net asset base over time, despite improving earnings.
- Return on Equity (ROE, %)
- The ROE showcases high volatility in the initial years, with a negative return of approximately -20.78% in 2019, followed by an extremely high positive return of over 157% in 2020. No data is available for subsequent years. The 2020 value likely reflects the low or negative equity base combined with a positive net income, distorting the typical interpretation of profitability relative to equity.
Return on Assets (ROA)
Altria Group Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings (losses) attributable to Altria | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| ROA, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| ROA, Industry | ||||||
| Consumer Staples | ||||||
Based on: 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), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net earnings (losses) attributable to Altria ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings (Losses) Attributable to Altria
- The net earnings exhibited a substantial turnaround over the analyzed period. In 2019, the company experienced a significant loss of 1,293 million USD. This situation reversed in 2020, with net earnings rising sharply to 4,467 million USD. Although there was a decline in 2021 to 2,475 million USD, earnings rebounded strongly in the following years, reaching 5,764 million USD in 2022 and further increasing to 8,130 million USD in 2023. The overall trend indicates a strong recovery and subsequent growth in profitability.
- Total Assets
- Total assets decreased steadily from 49,271 million USD in 2019 to 38,570 million USD in 2023. This decline reflects a reduction in the company’s asset base by approximately 21.7% over five years. The downward trajectory may suggest asset divestitures, depreciation, or other balance sheet adjustments impacting the total asset value.
- Return on Assets (ROA)
- The return on assets mirrored the earnings trend, with a negative performance of -2.62% in 2019 followed by a sharp improvement to 9.42% in 2020. Despite a slight dip to 6.26% in 2021, ROA increased notably thereafter, reaching 15.6% in 2022 and peaking at 21.08% in 2023. The rise in ROA indicates enhanced efficiency in generating profits from the asset base despite the decline in total assets.
- Summary of Financial Trends
- The overall financial performance exhibits a strong recovery from losses to increasing profitability over the five-year period. The decline in total assets contrasts with rising net earnings and significantly improved returns on assets, suggesting improved management efficiency and profitability despite a shrinking asset base. These trends point to positive financial health and effective utilization of resources in recent years.