Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Income Statement
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
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Profitability Ratios (Summary)
Linde plc, 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 consistent upward trend over the five-year period. Improvements are evident across all measured ratios, indicating strengthening financial performance. The most significant gains are observed in operating and net profit margins, alongside returns on equity and assets.
- Gross Profit Margin
- The gross profit margin experienced initial decline from 43.03% in 2021 to 41.70% in 2022. However, it subsequently exhibited strong growth, reaching 48.83% by 2025. This suggests improved cost management or pricing strategies in later years.
- Operating Profit Margin
- The operating profit margin remained relatively stable between 2021 and 2022, fluctuating around 16.1%. A substantial increase is then noted, rising to 26.25% in 2025. This indicates enhanced operational efficiency and control of operating expenses.
- Net Profit Margin
- Similar to the operating profit margin, the net profit margin showed modest variation between 2021 and 2022, holding steady at approximately 12.4%. A marked improvement is then apparent, culminating in a net profit margin of 20.30% in 2025. This suggests effective management of all expenses, including those related to financing and taxes.
- Return on Equity (ROE)
- Return on equity displayed a consistent upward trajectory, increasing from 8.69% in 2021 to 18.04% in 2025. This signifies a growing ability to generate profit from shareholder investments.
- Return on Assets (ROA)
- Return on assets also followed an upward trend, rising from 4.69% in 2021 to 8.19% in 2024, before experiencing a slight decrease to 7.95% in 2025. This indicates improved efficiency in utilizing assets to generate earnings. While the 2025 value is slightly lower than 2024, the overall trend remains positive.
Collectively, these ratios suggest a strengthening financial position and improved profitability over the analyzed period. The consistent increases in both margin and return ratios indicate effective strategic and operational management.
Return on Sales
Return on Investment
Gross Profit Margin
Linde plc, 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 margin | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Sherwin-Williams Co. | ||||||
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 margin ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited a fluctuating yet generally positive trend over the five-year period. Initial observations reveal a decrease followed by substantial improvement and subsequent stabilization at a high level.
- Gross Profit Margin Trend
- In 2021, the gross profit margin stood at 43.03%. A decline was observed in 2022, with the margin decreasing to 41.70%. However, 2023 marked a significant turning point, as the gross profit margin increased considerably to 46.76%. This upward trajectory continued into 2024, reaching 48.06%, and further improved slightly to 48.83% in 2025. This indicates increasing efficiency in managing production costs relative to sales.
- Relationship to Sales
- Sales figures demonstrate an overall increase from $30,793 million in 2021 to $33,986 million in 2025. While sales experienced a slight dip in 2023 ($32,854 million), they recovered in subsequent years. The concurrent increase in gross margin, particularly after 2022, suggests that the company has been able to leverage its sales growth to improve profitability, or that cost of goods sold has been effectively managed despite sales fluctuations.
- Gross Margin (US$ in millions)
- The absolute gross margin in US$ millions also increased consistently throughout the period, moving from $13,250 million in 2021 to $16,597 million in 2025. This reinforces the positive trend observed in the gross profit margin percentage and demonstrates a tangible increase in the company’s earnings before operating expenses.
The consistent improvement in gross profit margin from 2023 onwards is a positive indicator of the company’s operational performance and pricing strategy. The stabilization around 48.8% in 2025 suggests a mature and potentially sustainable level of profitability.
Operating Profit Margin
Linde plc, operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating profit | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Sherwin-Williams Co. | ||||||
| Operating Profit Margin, Sector | ||||||
| Chemicals | ||||||
| Operating Profit Margin, Industry | ||||||
| Materials | ||||||
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 demonstrates a clear upward trend over the five-year period. While operating profit and sales both increased, the margin expansion indicates improving operational efficiency and pricing power.
- Operating Profit Margin Trend
- In 2021, the operating profit margin stood at 16.19%. A slight decrease to 16.09% was observed in 2022. However, a significant increase occurred in 2023, with the margin reaching 24.42%. This positive momentum continued into 2024 and 2025, with the margin further increasing to 26.16% and 26.25% respectively. The increases in 2023, 2024, and 2025 suggest successful cost management strategies or favorable shifts in the product/service mix.
- Relationship to Operating Profit and Sales
- Operating profit increased consistently throughout the period, rising from US$4,984 million in 2021 to US$8,923 million in 2025. Sales also increased, though with a slight dip in 2023, moving from US$30,793 million in 2021 to US$33,986 million in 2025. The margin expansion indicates that operating profit grew at a faster rate than sales, suggesting improved profitability per dollar of revenue.
The consistent growth in operating profit margin over the latter part of the period is a positive indicator of the company’s financial health and operational performance. The stabilization of the margin at approximately 26.25% in both 2024 and 2025 may suggest a reaching of peak efficiency, or a new normal for the business.
Net Profit Margin
Linde plc, net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income, Linde plc | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Sherwin-Williams Co. | ||||||
| Net Profit Margin, Sector | ||||||
| Chemicals | ||||||
| Net Profit Margin, Industry | ||||||
| Materials | ||||||
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 income, Linde plc ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin demonstrates a consistent upward trend over the five-year period. While net income and sales both increased, the margin expansion indicates improving profitability relative to revenue.
- Net Profit Margin Trend
- In 2021, the net profit margin was 12.42%. This figure experienced minimal change in 2022, registering at 12.43%. A significant increase is then observed in 2023, with the margin rising to 18.87%. This positive trend continued into 2024, reaching 19.89%, and further improved to 20.30% in 2025.
The substantial increase in net profit margin from 2022 to 2023 suggests enhanced operational efficiency, improved pricing strategies, or a favorable shift in the company’s product mix. The continued, albeit more moderate, increases in 2024 and 2025 indicate that these positive factors were sustained. The consistent growth in net income alongside the expanding margin suggests strong financial performance.
- Relationship to Sales
- Sales exhibited growth from 2021 to 2025, increasing from US$30,793 million to US$33,986 million. However, the rate of margin expansion exceeded the rate of sales growth, particularly between 2022 and 2023, indicating that profitability improvements were not solely driven by increased sales volume.
Overall, the net profit margin analysis reveals a positive trajectory, signifying increasing profitability and efficient management of expenses relative to revenue generation.
Return on Equity (ROE)
Linde plc, ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income, Linde plc | ||||||
| Total Linde plc shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Sherwin-Williams Co. | ||||||
| ROE, Sector | ||||||
| Chemicals | ||||||
| ROE, Industry | ||||||
| Materials | ||||||
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 income, Linde plc ÷ Total Linde plc shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) demonstrates a consistent upward trajectory over the five-year period examined. Net income increased steadily, while total shareholders’ equity experienced a more volatile pattern. This combination resulted in a significant improvement in ROE.
- Net Income
- Net income increased from US$3,826 million in 2021 to US$6,898 million in 2025. The growth was relatively consistent year-over-year, with the largest absolute increase occurring between 2022 and 2023 (US$2,052 million).
- Total Shareholders’ Equity
- Total shareholders’ equity decreased from US$44,035 million in 2021 to US$38,092 million in 2024, before experiencing a slight increase to US$38,245 million in 2025. The largest decrease occurred between 2021 and 2022 (US$4,007 million). This suggests potential share repurchases or other capital adjustments impacting equity levels.
- Return on Equity (ROE)
- ROE increased from 8.69% in 2021 to 18.04% in 2025. The most substantial increase in ROE occurred between 2022 and 2023, rising from 10.36% to 15.61%. The rate of increase slowed slightly in subsequent years, but remained positive. The increase in ROE is attributable to the combination of growing net income and, initially, decreasing shareholders’ equity. The stabilization of shareholders’ equity in the later years further contributed to the continued ROE improvement.
The observed trend suggests increasing efficiency in generating profits from shareholders’ investments. While net income growth is a primary driver, the changes in shareholders’ equity also play a significant role in the ROE calculation. Continued monitoring of both net income and equity levels is recommended to assess the sustainability of this positive trend.
Return on Assets (ROA)
Linde plc, ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income, Linde plc | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Sherwin-Williams Co. | ||||||
| ROA, Sector | ||||||
| Chemicals | ||||||
| ROA, Industry | ||||||
| Materials | ||||||
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 income, Linde plc ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited a consistent upward trend between 2021 and 2024, followed by a slight decrease in the most recent year presented. This indicates improving efficiency in utilizing assets to generate profit over the initial period, with a leveling off in the final year.
- ROA Trend
- In 2021, the ROA stood at 4.69%. It increased to 5.21% in 2022, representing a modest improvement in profitability relative to asset base. The rate of improvement accelerated in 2023, reaching 7.67%, and continued into 2024 with a further increase to 8.19%. This demonstrates a strengthening ability to generate earnings from its assets. However, in 2025, the ROA experienced a slight decline to 7.95%, suggesting a potential stabilization or minor reduction in asset efficiency.
- Net Income Influence
- Net income increased steadily from US$3,826 million in 2021 to US$6,898 million in 2025. This growth in net income was a primary driver of the ROA improvement observed between 2021 and 2024. While net income continued to rise in 2025, the slight decrease in ROA suggests that asset growth outpaced the increase in net income during that period.
- Asset Base Influence
- Total assets decreased slightly from US$81,605 million in 2021 to US$79,658 million in 2022. They then recovered to US$80,811 million in 2023 and experienced a minor decrease to US$80,147 million in 2024. A more substantial increase was observed in 2025, reaching US$86,817 million. The asset increase in 2025, coupled with a smaller increase in net income, likely contributed to the observed decrease in ROA for that year.
Overall, the ROA demonstrates a positive trajectory with a recent moderation. The company has generally become more effective at converting its investments in assets into profits, although the latest period indicates a potential shift in this trend due to asset expansion.