Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Debt to Equity since 2005
- Price to Sales (P/S) since 2005
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Profitability Ratios (Summary)
Danaher Corp., 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 generally declining trend across the five-year period. While gross profit margin remained relatively stable, operating and net profit margins, as well as returns on equity and assets, all experienced decreases.
- Gross Profit Margin
- The gross profit margin began at 60.95% in 2021, decreased to 60.21% in 2022, then declined further to 58.74% in 2023. A slight recovery to 59.50% occurred in 2024, followed by a further decrease to 59.11% in 2025. This indicates a consistent, though moderate, erosion in the company’s ability to control production costs relative to revenue.
- Operating and Net Profit Margins
- Operating profit margin increased from 25.35% in 2021 to 27.61% in 2022, but subsequently decreased significantly to 21.77% in 2023, continuing to 20.37% in 2024 and 19.09% in 2025. A similar pattern is observed in the net profit margin, moving from 21.84% in 2021 to 22.91% in 2022, then declining to 19.94% in 2023, 16.33% in 2024, and 14.71% in 2025. These declines suggest increasing operating expenses and/or a higher effective tax rate impacting overall profitability.
- Return on Equity (ROE)
- Return on equity exhibited a decline from 14.24% in 2021 to 14.39% in 2022, followed by a substantial decrease to 8.91% in 2023. This downward trend continued, reaching 7.87% in 2024 and 6.88% in 2025. This indicates a diminishing ability to generate profit from shareholder investments.
- Return on Assets (ROA)
- Return on assets followed a similar trajectory, decreasing from 7.73% in 2021 to 8.55% in 2022, then declining to 5.64% in 2023, 5.03% in 2024, and 4.33% in 2025. This suggests a decreasing efficiency in utilizing assets to generate earnings.
In summary, while the gross profit margin showed some resilience, the overall trend across all measured profitability ratios points to a weakening financial performance over the observed period. The declines in operating and net profit margins, coupled with decreasing returns on equity and assets, warrant further investigation into the underlying drivers of these trends.
Return on Sales
Return on Investment
Gross Profit Margin
Danaher Corp., 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 | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| 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: 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 ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited relative stability over the five-year period, with some fluctuation. Gross profit initially increased from 2021 to 2022, but subsequently decreased and then showed modest recovery. Sales followed a similar pattern, increasing initially and then declining before a slight increase in the most recent year.
- Gross Profit Margin Trend
- The gross profit margin began at 60.95% in 2021, decreasing slightly to 60.21% in 2022. A more pronounced decline was observed in 2023, falling to 58.74%. The margin partially recovered in 2024, reaching 59.50%, and remained relatively stable at 59.11% in 2025. This suggests potential pressures on input costs or pricing strategies in 2023, followed by some mitigation in subsequent periods.
- Relationship between Gross Profit and Sales
- Gross profit increased from US$17,952 million in 2021 to US$18,949 million in 2022, aligning with the increase in sales. However, gross profit decreased significantly to US$14,034 million in 2023, coinciding with a substantial decline in sales. Both gross profit and sales experienced a minor increase from 2024 to 2025, indicating a potential stabilization of performance. The consistent relationship between the two metrics suggests that changes in gross profit are largely driven by fluctuations in sales volume.
Overall, the gross profit margin demonstrates resilience despite variations in sales. The dip in 2023 warrants further investigation to understand the underlying factors contributing to the reduced profitability, but the subsequent stabilization suggests corrective actions or favorable market conditions may have taken effect.
Operating Profit Margin
Danaher Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating profit | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| 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: 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 profit ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited a fluctuating pattern over the five-year period. Initially, the metric demonstrated growth, followed by a period of decline.
- Operating Profit Margin Trend
- In 2021, the operating profit margin stood at 25.35%. This increased to 27.61% in 2022, representing the highest value observed during the analyzed timeframe. However, subsequent years witnessed a consistent decrease. The margin declined to 21.77% in 2023, then to 20.37% in 2024, and further to 19.09% in 2025.
The observed decline in operating profit margin, despite relatively stable sales figures in the later years, suggests potential pressures on profitability. While sales experienced a decrease in 2023, they remained relatively consistent between 2023 and 2025. The concurrent decrease in operating profit margin during this period indicates that the company may be facing increasing costs of goods sold, operating expenses, or a combination of both.
- Relationship to Operating Profit and Sales
- Operating profit increased from US$7,465 million in 2021 to US$8,688 million in 2022, aligning with the peak in operating profit margin. However, operating profit then decreased significantly to US$5,202 million in 2023 and continued to decline, reaching US$4,690 million in 2025. Sales also decreased in 2023, but remained relatively flat in the following two years. The disproportionate decrease in operating profit compared to sales from 2022 to 2025 is a key driver of the declining operating profit margin.
Further investigation into the components of operating expenses and cost of goods sold would be necessary to pinpoint the specific factors contributing to the margin compression observed in the latter part of the period.
Net Profit Margin
Danaher Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| 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: 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 ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited a fluctuating pattern over the five-year period. Initially, the metric demonstrated growth, followed by a consistent decline.
- Net Profit Margin Trend
- In 2021, the net profit margin stood at 21.84%. This increased to 22.91% in 2022, representing the highest value observed during the analyzed timeframe. However, subsequent years witnessed a downward trend. The margin decreased to 19.94% in 2023, then to 16.33% in 2024, and further to 14.71% in 2025.
The decline in net profit margin, particularly from 2022 onwards, warrants further investigation. While sales remained relatively stable between 2022 and 2025, net earnings experienced a significant reduction. This suggests that factors beyond revenue generation, such as increased costs of goods sold, operating expenses, or other non-operating items, may be contributing to the diminishing profitability.
- Relationship to Sales
- Sales increased from US$29,453 million in 2021 to US$31,471 million in 2022. Despite this sales growth, net earnings also increased, contributing to the peak in net profit margin in 2022. However, sales decreased to US$23,890 million in 2023 and remained relatively flat at US$23,875 million in 2024, before a slight increase to US$24,568 million in 2025. Concurrently, net earnings decreased substantially from 2022 to 2025, driving the observed decline in the net profit margin.
The consistent decrease in net profit margin from 2022 to 2025 indicates a weakening ability to translate sales into profit. A comprehensive review of the income statement is recommended to pinpoint the specific drivers behind this trend and to assess the sustainability of current profitability levels.
Return on Equity (ROE)
Danaher Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Total Danaher stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| 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: 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 Danaher stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited a declining trend over the five-year period examined. While initially strong, the ratio decreased consistently from 2021 through 2025. This decline occurred alongside fluctuations in both net earnings and total stockholders’ equity.
- ROE Trend
- In 2021, ROE stood at 14.24%. It experienced a slight increase to 14.39% in 2022, representing the peak value within the observed timeframe. Subsequently, ROE decreased significantly to 8.91% in 2023, and continued its downward trajectory, reaching 7.87% in 2024 and 6.88% in 2025. This represents a substantial reduction from the initial value.
- Net Earnings Impact
- Net earnings increased from US$6,433 million in 2021 to US$7,209 million in 2022, potentially contributing to the slight increase in ROE during that year. However, net earnings then decreased considerably to US$4,764 million in 2023, and continued to fall to US$3,899 million in 2024 and US$3,614 million in 2025. This consistent decline in net earnings appears to be a primary driver of the overall ROE decline.
- Stockholders’ Equity Impact
- Total stockholders’ equity generally increased from US$45,167 million in 2021 to US$53,486 million in 2023. However, it decreased to US$49,543 million in 2024 before rising slightly to US$52,534 million in 2025. While the equity increases in earlier years partially offset the impact of declining net earnings, the decrease in 2024 and modest increase in 2025 did not prevent the continued decline in ROE. The effect of equity changes on ROE was less pronounced than the effect of net earnings.
The combined effect of decreasing net earnings and fluctuating stockholders’ equity resulted in a consistent and significant decline in ROE over the period. The decreasing profitability, as reflected in net earnings, appears to be the dominant factor influencing this trend.
Return on Assets (ROA)
Danaher Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| AbbVie Inc. | ||||||
| Amgen Inc. | ||||||
| Bristol-Myers Squibb Co. | ||||||
| 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: 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 a fluctuating pattern over the five-year period. Initially, the ROA demonstrated growth, followed by a consistent decline.
- Overall Trend
- The ROA increased from 7.73% in 2021 to a peak of 8.55% in 2022. Subsequently, a clear downward trend emerged, with the ROA decreasing to 5.64% in 2023, 5.03% in 2024, and further to 4.33% in 2025.
- Net Earnings Impact
- Net earnings increased from US$6,433 million in 2021 to US$7,209 million in 2022, contributing to the ROA increase observed in that year. However, net earnings then decreased significantly to US$4,764 million in 2023, and continued to decline to US$3,899 million in 2024 and US$3,614 million in 2025. This decline in net earnings is a primary driver of the observed ROA decrease.
- Asset Base Influence
- Total assets remained relatively stable between 2021 and 2023, fluctuating between US$83,184 million and US$84,488 million. A notable decrease in total assets occurred in 2024, falling to US$77,542 million, which partially offset the impact of declining net earnings on the ROA. Assets then increased again in 2025 to US$83,464 million, but not enough to reverse the ROA decline.
The combined effect of decreasing net earnings and fluctuating total assets resulted in a consistent reduction in ROA from 2022 through 2025. While asset management appears to have had a mitigating effect in 2024, the primary driver of the ROA decline is the reduction in profitability as reflected by net earnings.