Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Debt
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Profitability Ratios (Summary)
Ecolab Inc., profitability ratios (quarterly data)
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
- Gross Profit Margin
- The gross profit margin exhibited a general decline from early 2018 through the end of 2021. Starting at 44.97% in March 2018, it decreased steadily to around 40.19% by December 2021. There was relative stability in the range of approximately 41% to 42% throughout 2019 and 2020, followed by a slight downward trend into 2021.
- Operating Profit Margin
- The operating profit margin showed a gradual decrease over the examined period. It began near 14.14% in March 2018 and fluctuated mildly around the low 13% to 14% range until early 2020. A notable decline was observed during 2020, dropping to around 11.84% at year-end 2020. The margin somewhat recovered in 2021, ending at approximately 12.55% in December 2021.
- Net Profit Margin
- The net profit margin maintained a positive range between roughly 9.7% and 11% through the first few quarters, from March 2018 up to March 2020. However, in the subsequent quarters of 2020, the margin turned significantly negative, reaching as low as -11.11% by the end of that year. A strong recovery occurred in 2021, with margins returning to positive territory near 8.87% by December 2021.
- Return on Equity (ROE)
- ROE demonstrated robust performance prior to 2020, generally ranging between 17.7% and 20.2%. A sharp reversal occurred during 2020, with values deteriorating to as low as -20.58% by December 2020. In 2021, ROE rebounded impressively, recovering to approximately 15.64% by the end of the year, though it remained below pre-2020 levels.
- Return on Assets (ROA)
- Similar to ROE, ROA showed steady figures before 2020, fluctuating between about 6.9% and 8.0%. During 2020, a marked decline was evident, with ROA dipping into negative territory and reaching approximately -7.11% by year-end. This negative trend reversed in 2021, with ROA climbing back to 5.33% by December, yet still remaining under the earlier pre-2020 performance.
Return on Sales
Return on Investment
Gross Profit Margin
Ecolab Inc., gross profit margin calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Gross profit | |||||||||||||||||||||
| Net sales | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| Gross profit margin1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Gross Profit Margin, Competitors2 | |||||||||||||||||||||
| Linde plc | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
Gross profit margin = 100
× (Gross profitQ4 2021
+ Gross profitQ3 2021
+ Gross profitQ2 2021
+ Gross profitQ1 2021)
÷ (Net salesQ4 2021
+ Net salesQ3 2021
+ Net salesQ2 2021
+ Net salesQ1 2021)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial analysis reveals the following notable trends and patterns over the observed quarters:
- Gross Profit
- Gross profit exhibited a fluctuating trend with initial growth from the first quarter of 2018 through the end of 2019, reaching a peak near the end of 2019. However, starting in the first quarter of 2020, gross profit declined substantially, hitting its lowest point in the second quarter of 2020 amid a notable drop in net sales. Thereafter, there was a gradual recovery in gross profit through to the last quarter of 2021, though it remained below the 2019 peak levels.
- Net Sales
- Net sales followed a somewhat similar pattern to gross profit. The sales volume grew steadily from early 2018 until late 2019, peaking in the fourth quarter of 2019. Subsequently, there was a sharp decline in the first half of 2020, corresponding to the period of gross profit reduction. Following this trough, net sales began to improve progressively, though by the fourth quarter of 2021, the levels had not fully returned to the previous highs recorded before 2020.
- Gross Profit Margin
- The gross profit margin percentage displayed a gradual decreasing trend from 44.97% in the first quarter of 2018 down to levels fluctuating in the low 40s by the end of 2021. Although the margin showed some short-term variations, there was an overall decline in profitability ratios over the entire period. Margins remained relatively stable around the 40-42% range during most quarters but did not recover to the higher margins observed at the outset of the series.
In summary, the financial results indicate that the company experienced growth in sales and profitability through 2019, followed by a significant downturn in 2020 coinciding with the broader economic challenges during that period. The subsequent recovery phase into 2021 saw improved sales and gross profit figures; however, margins compressed modestly compared to earlier years, suggesting increased cost pressures or changes in product mix affecting profitability. The overall trend points to resilience in sales recovery but highlights ongoing margin management challenges.
Operating Profit Margin
Ecolab Inc., operating profit margin calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Operating income | |||||||||||||||||||||
| Net sales | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| Operating profit margin1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Operating Profit Margin, Competitors2 | |||||||||||||||||||||
| Linde plc | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
Operating profit margin = 100
× (Operating incomeQ4 2021
+ Operating incomeQ3 2021
+ Operating incomeQ2 2021
+ Operating incomeQ1 2021)
÷ (Net salesQ4 2021
+ Net salesQ3 2021
+ Net salesQ2 2021
+ Net salesQ1 2021)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Operating Income Trends
- The operating income exhibited fluctuations over the evaluated quarters. Initially, there was a notable upward trend from March 2018 to December 2018, with operating income increasing from 354,300 thousand US dollars to 581,900 thousand US dollars. In 2019, operating income showed variability but generally remained elevated compared to the early 2018 levels, peaking at 587,600 thousand US dollars in September 2019. However, starting in 2020, operating income experienced a significant decline in the second quarter, hitting a low of 192,000 thousand US dollars, likely reflecting external challenges during this period. The remainder of 2020 showed some recovery, with values rising back above 400,000 thousand US dollars by the year's end. In 2021, operating income continued to recover but did not return to the peak levels seen in late 2018 and 2019, with figures fluctuating around 300,000 to 460,000 thousand US dollars towards the final quarter.
- Net Sales Patterns
- Net sales followed a somewhat consistent but slightly declining pattern over the analyzed timeframe. The net sales grew from 3,470,900 thousand US dollars in March 2018 to a peak of 3,826,000 thousand US dollars by December 2019. This growth trend was followed by a sharp decrease starting in the first quarter of 2020, dropping to a low of 2,685,700 thousand US dollars in the second quarter of 2020. Although net sales showed a recovery by the end of 2020 and into 2021, the figures remained below the pre-2020 peak levels, fluctuating between approximately 2,885,000 and 3,364,600 thousand US dollars in 2021. This indicates a partial but incomplete recovery in sales volume over the periods observed.
- Operating Profit Margin Analysis
- The operating profit margin remained fairly stable with modest fluctuations across the periods. Margins hovered around 13% to 14.3% during 2018 and 2019, showing consistent profitability relative to net sales. In 2020, despite the decline in operating income and sales, the margin decreased to the low 11% to nearly 12% range, reflecting some pressure on profitability margins likely due to adverse conditions. There was a slight rebound in 2021, with operating margins rising to a range between approximately 11.3% and 13.1%, indicating some improvement in the efficiency or cost management but not fully returning to earlier margin highs.
- Overall Observations
- The data demonstrates that the company experienced growth in operating income and net sales through 2018 and 2019, accompanied by relatively stable operating margins. The impact of 2020 is evident in the sharp declines in operating income and sales, alongside a reduction in profitability margins, consistent with widespread economic disruptions during that period. Partial recovery trends in 2020's latter half and throughout 2021 indicate resilience, although financial metrics did not universally return to pre-2020 levels by the end of 2021. The fluctuations in operating margins suggest a persistent balancing act between managing costs and responding to market conditions through this period.
Net Profit Margin
Ecolab Inc., net profit margin calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net income (loss) attributable to Ecolab | |||||||||||||||||||||
| Net sales | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| Net profit margin1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| Net Profit Margin, Competitors2 | |||||||||||||||||||||
| Linde plc | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
Net profit margin = 100
× (Net income (loss) attributable to EcolabQ4 2021
+ Net income (loss) attributable to EcolabQ3 2021
+ Net income (loss) attributable to EcolabQ2 2021
+ Net income (loss) attributable to EcolabQ1 2021)
÷ (Net salesQ4 2021
+ Net salesQ3 2021
+ Net salesQ2 2021
+ Net salesQ1 2021)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data reveals several notable trends in the quarterly performance over the examined period.
- Net Income (Loss) Attributable to the Company
- From early 2018 through the end of 2019, net income displayed a generally positive and upward trajectory, with quarterly figures rising from approximately $247 million to $430 million. However, in the first half of 2020, a sharp and substantial decline is evident, most notably in the second quarter with a recorded loss exceeding $2 billion. This severe downturn was followed by a recovery phase starting in the third quarter of 2020, where net income returned to positive territory and stabilized around the $300 million mark through 2021.
- Net Sales
- Net sales exhibited moderate growth from 2018 through 2019, increasing from roughly $3.47 billion to $3.82 billion, indicating steady business expansion during that timeframe. Yet, net sales experienced a significant decline in early 2020, with the lowest point recorded in the second quarter at approximately $2.69 billion. After this trough, sales gradually improved over the subsequent quarters, reaching around $3.36 billion by the end of 2021, although still slightly under the pre-2020 peak.
- Net Profit Margin
- The net profit margin remained fairly stable at around 10% throughout 2018 and 2019, reflecting consistent profitability relative to sales. This was interrupted in the first three quarters of 2020, during which the margin markedly deteriorated into negative territory, reaching a low of about -11%. This negative margin aligns with the significant net loss observed during the same period. Improvement in the margin was observed from the fourth quarter of 2020 onward, with the ratio returning to positive levels near 9% by the end of 2021, signaling restored profitability.
Overall, the financial performance indicates that the company experienced strong and stable growth until early 2020, when a sharp adverse event triggered a temporary but severe downturn in profitability and sales. Recovery was evident in the latter half of 2020 and continued through 2021, with both net income and profit margins returning to positive and relatively stable levels, though net sales had not fully returned to previous highs by the end of the period.
Return on Equity (ROE)
Ecolab Inc., ROE calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net income (loss) attributable to Ecolab | |||||||||||||||||||||
| Total Ecolab shareholders’ equity | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| ROE1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| ROE, Competitors2 | |||||||||||||||||||||
| Linde plc | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
ROE = 100
× (Net income (loss) attributable to EcolabQ4 2021
+ Net income (loss) attributable to EcolabQ3 2021
+ Net income (loss) attributable to EcolabQ2 2021
+ Net income (loss) attributable to EcolabQ1 2021)
÷ Total Ecolab shareholders’ equity
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends in the company’s financial performance and position over the reported periods.
- Net Income (Loss) Attributable to Ecolab
- Net income generally exhibited an upward trend from March 2018 through December 2019, peaking consistently above $400 million in the third and fourth quarters of 2018 and 2019. However, a significant anomaly occurred in the second quarter of 2020, with a substantial net loss of approximately $2 billion, representing an extraordinary deviation from prior profitability. Following this loss, net income returned to positive figures, though at lower and more fluctuating amounts compared to pre-2020 levels, ranging from approximately $193 million to $325 million in 2021.
- Total Ecolab Shareholders’ Equity
- Shareholders’ equity showed a steady increase from March 2018 through March 2020, moving from about $7.6 billion to $8.8 billion. Thereafter, a notable decrease occurred in the second quarter of 2020, dropping to approximately $5.9 billion, likely reflecting the large net loss reported in the same quarter. Post this decline, equity resumed a gradual upward trajectory through 2021, rising to over $7.2 billion by December 2021, signaling recovery and growth in the company’s net assets.
- Return on Equity (ROE)
- ROE was relatively stable and strong in 2018 and 2019, mostly maintaining levels between 17.7% and 20.2%. The sharp decline in 2020 is evident, with ROE plunging into negative territory starting in the first quarter and worsening to nearly -20.6% by the end of that year. This decline corresponds directly with the reported net loss and fall in shareholders’ equity during the same period. In 2021, ROE improved significantly, recovering to approximately 15.6% to 16.3%, although it remained below the pre-2020 values, indicating partial restoration of profitability.
Overall, the financial data suggest that the company experienced a period of robust profitability and equity growth up until early 2020, after which there was a severe financial setback likely related to extraordinary or non-recurring events. The subsequent recovery in net income, equity, and ROE throughout 2021 indicates positive management actions and operational improvements that helped restore financial health, albeit without yet reaching previous peak levels.
Return on Assets (ROA)
Ecolab Inc., ROA calculation (quarterly data)
| Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | Dec 31, 2018 | Sep 30, 2018 | Jun 30, 2018 | Mar 31, 2018 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||||||||||||||||||
| Net income (loss) attributable to Ecolab | |||||||||||||||||||||
| Total assets | |||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||
| ROA1 | |||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||
| ROA, Competitors2 | |||||||||||||||||||||
| Linde plc | |||||||||||||||||||||
| Sherwin-Williams Co. | |||||||||||||||||||||
Based on: 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
1 Q4 2021 Calculation
ROA = 100
× (Net income (loss) attributable to EcolabQ4 2021
+ Net income (loss) attributable to EcolabQ3 2021
+ Net income (loss) attributable to EcolabQ2 2021
+ Net income (loss) attributable to EcolabQ1 2021)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to Ecolab
- The net income generally exhibited a positive trend from the first quarter of 2018 through the fourth quarter of 2019, with quarterly earnings consistently rising and peaking in the third and fourth quarters of 2019. However, a significant disruption occurred in the second quarter of 2020, where the company reported a substantial loss, reaching approximately -$2 billion. Following this sharp decline, net income returned to positive figures in subsequent quarters in 2020 and into 2021, though the values did not fully return to the pre-loss peak levels seen in late 2019.
- Total Assets
- Total assets showed relative stability from 2018 through early 2020, with minor fluctuations around a range of approximately $20.1 billion to $22.3 billion. Notably, there was a pronounced decrease in total assets during the second quarter of 2020, coinciding with the large net loss recorded. After this trough, assets stabilized but remained somewhat volatile through 2021, fluctuating between approximately $17.9 billion and $21.2 billion without a clear directional recovery trend by the end of the period.
- Return on Assets (ROA)
- ROA trends mirrored the dynamics of net income and total assets. Initially, ROA values were stable and positive, mostly ranging between 7% and 8% from 2018 through the end of 2019. The second quarter of 2020 saw a sharp decline in ROA, entering deeply negative territory and reaching lows around -7%. This deterioration aligned with the significant net loss and asset reduction during the same period. From late 2020 through 2021, ROA gradually recovered back into positive figures, albeit remaining below the peak performance levels observed in prior years.
- Overall Observations
- The quarter ending June 30, 2020 constitutes a clear inflection point, marked by a substantial negative net income, a sharp decline in total assets, and a strongly negative ROA. This suggests an extraordinary event or crisis impacting operational and financial performance. In the aftermath, the company demonstrated resilience, returning to profitability and regaining positive asset returns, though not fully restoring prior growth momentum within the observed timeframe.