## Profitability Analysis

Quarterly Data

Difficulty: Beginner

Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).

### Ratios (Summary)

**Danaher Corp., profitability ratios (quarterly data)**

Ratio | Description | The company |
---|---|---|

Gross profit margin |
Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Danaher Corp.'s gross profit margin improved from Q3 2017 to Q4 2017 and from Q4 2017 to Q1 2018. |

Operating profit margin |
A profitability ratio calculated as operating income divided by revenue. | Danaher Corp.'s operating profit margin improved from Q3 2017 to Q4 2017 and from Q4 2017 to Q1 2018. |

Net profit margin |
An indicator of profitability, calculated as net income divided by revenue. | Danaher Corp.'s net profit margin improved from Q3 2017 to Q4 2017 but then slightly deteriorated from Q4 2017 to Q1 2018. |

ROE |
A profitability ratio calculated as net income divided by shareholders' equity. | Danaher Corp.'s ROE improved from Q3 2017 to Q4 2017 but then deteriorated significantly from Q4 2017 to Q1 2018. |

ROA |
A profitability ratio calculated as net income divided by total assets. | Danaher Corp.'s ROA improved from Q3 2017 to Q4 2017 and from Q4 2017 to Q1 2018. |

### Gross Profit Margin

**Danaher Corp., gross profit margin calculation (quarterly data)**

*Q1 2018 Calculations*

^{1} Gross profit margin = 100
× (Gross profit_{Q1 2018}
+ Gross profit_{Q4 2017}
+ Gross profit_{Q3 2017}
+ Gross profit_{Q2 2017})
÷ (Sales_{Q1 2018}
+ Sales_{Q4 2017}
+ Sales_{Q3 2017}
+ Sales_{Q2 2017})

= 100
× (2,643,600 + 2,839,100 + 2,536,800 + 2,482,300)
÷ (4,695,400 + 5,085,700 + 4,528,200 + 4,510,100)
= 55.80%

Ratio | Description | The company |
---|---|---|

Gross profit margin |
Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Danaher Corp.'s gross profit margin improved from Q3 2017 to Q4 2017 and from Q4 2017 to Q1 2018. |

### Operating Profit Margin

**Danaher Corp., operating profit margin calculation (quarterly data)**

*Q1 2018 Calculations*

^{1} Operating profit margin = 100
× (Operating profit_{Q1 2018}
+ Operating profit_{Q4 2017}
+ Operating profit_{Q3 2017}
+ Operating profit_{Q2 2017})
÷ (Sales_{Q1 2018}
+ Sales_{Q4 2017}
+ Sales_{Q3 2017}
+ Sales_{Q2 2017})

= 100 × (743,000 + 953,000 + 767,500 + 683,700)
÷ (4,695,400 + 5,085,700 + 4,528,200 + 4,510,100)
= 16.72%

Ratio | Description | The company |
---|---|---|

Operating profit margin |
A profitability ratio calculated as operating income divided by revenue. | Danaher Corp.'s operating profit margin improved from Q3 2017 to Q4 2017 and from Q4 2017 to Q1 2018. |

### Net Profit Margin

**Danaher Corp., net profit margin calculation (quarterly data)**

*Q1 2018 Calculations*

^{1} Net profit margin = 100
× (Net earnings_{Q1 2018}
+ Net earnings_{Q4 2017}
+ Net earnings_{Q3 2017}
+ Net earnings_{Q2 2017})
÷ (Sales_{Q1 2018}
+ Sales_{Q4 2017}
+ Sales_{Q3 2017}
+ Sales_{Q2 2017})

= 100 × (566,600 + 856,600 + 572,100 + 557,300)
÷ (4,695,400 + 5,085,700 + 4,528,200 + 4,510,100)
= 13.56%

Ratio | Description | The company |
---|---|---|

Net profit margin |
An indicator of profitability, calculated as net income divided by revenue. | Danaher Corp.'s net profit margin improved from Q3 2017 to Q4 2017 but then slightly deteriorated from Q4 2017 to Q1 2018. |

### Return on Equity (ROE)

**Danaher Corp., ROE calculation (quarterly data)**

*Q1 2018 Calculations*

^{1} ROE = 100
× (Net earnings_{Q1 2018}
+ Net earnings_{Q4 2017}
+ Net earnings_{Q3 2017}
+ Net earnings_{Q2 2017})
÷ Total Danaher stockholders' equity

= 100 × (566,600 + 856,600 + 572,100 + 557,300)
÷ 27,189,900 = 9.39%

Ratio | Description | The company |
---|---|---|

ROE |
A profitability ratio calculated as net income divided by shareholders' equity. | Danaher Corp.'s ROE improved from Q3 2017 to Q4 2017 but then deteriorated significantly from Q4 2017 to Q1 2018. |

### Return on Assets (ROA)

**Danaher Corp., ROA calculation (quarterly data)**

*Q1 2018 Calculations*

^{1} ROA = 100
× (Net earnings_{Q1 2018}
+ Net earnings_{Q4 2017}
+ Net earnings_{Q3 2017}
+ Net earnings_{Q2 2017})
÷ Total assets

= 100 × (566,600 + 856,600 + 572,100 + 557,300)
÷ 47,145,200 = 5.41%

Ratio | Description | The company |
---|---|---|

ROA |
A profitability ratio calculated as net income divided by total assets. | Danaher Corp.'s ROA improved from Q3 2017 to Q4 2017 and from Q4 2017 to Q1 2018. |