## Profitability Analysis

Difficulty: Beginner

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

### Ratios (Summary)

**DowDuPont Inc., profitability ratios**

Source: Based on data from DowDuPont Inc. Annual Reports

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

Gross profit margin |
Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | DowDuPont Inc.'s gross profit margin deteriorated from 2015 to 2016 and from 2016 to 2017. |

Operating profit margin |
A profitability ratio calculated as operating income divided by revenue. | DowDuPont Inc.'s operating profit margin deteriorated from 2015 to 2016 and from 2016 to 2017. |

Net profit margin |
An indicator of profitability, calculated as net income divided by revenue. | DowDuPont Inc.'s net profit margin deteriorated from 2015 to 2016 and from 2016 to 2017. |

ROE |
A profitability ratio calculated as net income divided by shareholders' equity. | DowDuPont Inc.'s ROE deteriorated from 2015 to 2016 and from 2016 to 2017. |

ROA |
A profitability ratio calculated as net income divided by total assets. | DowDuPont Inc.'s ROA deteriorated from 2015 to 2016 and from 2016 to 2017. |

### Gross Profit Margin

**DowDuPont Inc., gross profit margin calculation**

Source: Based on data from DowDuPont Inc. Annual Reports

*2017 Calculations*

^{1} Gross profit margin = 100 × Gross margin ÷ Net sales

= 100 × 12,070 ÷ 62,484 = 19.32%

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

Gross profit margin |
Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | DowDuPont Inc.'s gross profit margin deteriorated from 2015 to 2016 and from 2016 to 2017. |

### Operating Profit Margin

**DowDuPont Inc., operating profit margin calculation, comparison to benchmarks**

Source: Based on data from DowDuPont Inc. Annual Reports

*2017 Calculations*

^{1} Operating profit margin = 100 × Operating income ÷ Net sales

= 100 × 545 ÷ 62,484 = 0.87%

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

Operating profit margin |
A profitability ratio calculated as operating income divided by revenue. | DowDuPont Inc.'s operating profit margin deteriorated from 2015 to 2016 and from 2016 to 2017. |

### Net Profit Margin

**DowDuPont Inc., net profit margin calculation, comparison to benchmarks**

Source: Based on data from DowDuPont Inc. Annual Reports

*2017 Calculations*

^{1} Net profit margin = 100 × Net income attributable to DowDuPont Inc. ÷ Net sales

= 100 × 1,460 ÷ 62,484 = 2.34%

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

Net profit margin |
An indicator of profitability, calculated as net income divided by revenue. | DowDuPont Inc.'s net profit margin deteriorated from 2015 to 2016 and from 2016 to 2017. |

### Return on Equity (ROE)

**DowDuPont Inc., ROE calculation, comparison to benchmarks**

Source: Based on data from DowDuPont Inc. Annual Reports

*2017 Calculations*

^{1} ROE = 100 × Net income attributable to DowDuPont Inc. ÷ DowDuPont's stockholders' equity

= 100 × 1,460 ÷ 100,330 = 1.46%

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

ROE |
A profitability ratio calculated as net income divided by shareholders' equity. | DowDuPont Inc.'s ROE deteriorated from 2015 to 2016 and from 2016 to 2017. |

### Return on Assets (ROA)

**DowDuPont Inc., ROA calculation, comparison to benchmarks**

Source: Based on data from DowDuPont Inc. Annual Reports

*2017 Calculations*

^{1} ROA = 100 × Net income attributable to DowDuPont Inc. ÷ Total assets

= 100 × 1,460 ÷ 192,164 = 0.76%

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

ROA |
A profitability ratio calculated as net income divided by total assets. | DowDuPont Inc.'s ROA deteriorated from 2015 to 2016 and from 2016 to 2017. |