Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Analysis of Solvency Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Return on Assets (ROA) since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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Profitability Ratios (Summary)
Newmont Corp., profitability ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Gross Profit Margin
- The gross profit margin exhibited significant fluctuation over the five-year period. It increased from 23.67% in 2019 to a peak of 33.2% in 2020, indicating improved cost efficiency or pricing power during that year. Subsequently, there was a consistent decline each year, dropping to 12.46% by the end of 2023. This downward trend suggests increasing cost pressures or reduced pricing ability, adversely affecting the gross profitability of the company.
- Operating Profit Margin
- The operating profit margin followed a similar volatile pattern, rising sharply from 13.11% in 2019 to 24.41% in 2020, which may reflect improved operational efficiency or favorable market conditions during that time. However, the margin sharply decreased in the subsequent years, falling to a negative figure of -14.39% in 2023. This indicates that operating expenses have increasingly outpaced operating revenue, resulting in operational losses in the latest reported period.
- Net Profit Margin
- Net profit margin decreased over the period, starting at 28.8% in 2019, slightly declining to 24.61% in 2020, then experiencing more pronounced drops to single-digit and negative values by 2023 (-21.11%). This deterioration points to rising expenses, losses, or other negative impacts on the bottom line such as increased interest expenses, taxes, or extraordinary items, culminating in net losses during the last two years.
- Return on Equity (ROE)
- Return on equity demonstrated a downward trend, beginning at 13.1% in 2019 and gradually declining to negative territory by 2022 (-2.22%) and further to -8.59% in 2023. This reflects diminishing profitability generated from shareholders' equity, suggesting that the company’s core business is not generating positive returns for shareholders in recent years.
- Return on Assets (ROA)
- Return on assets also declined over the period studied, from 7.02% in 2019 to negative values by 2022 (-1.11%) and 2023 (-4.49%). This indicates that the company’s assets generated decreasing returns, ultimately leading to negative profitability relative to the asset base. The consistent decline aligns with trends observed in profitability margins, underscoring the weakening operational performance and asset utilization efficiency.
Return on Sales
Return on Investment
Gross Profit Margin
Newmont Corp., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Sales
- The sales figures show a generally positive trend from 2019 to 2021, increasing from 9,740 million US dollars in 2019 to a peak of 12,222 million US dollars in 2021. However, after 2021, sales experienced a slight decline, decreasing to 11,915 million US dollars in 2022 and further marginally dropping to 11,812 million US dollars in 2023.
- Gross Profit
- Gross profit exhibited a strong increase from 2,305 million US dollars in 2019 to 3,817 million US dollars in 2020, indicating a significant improvement in profitability. Nevertheless, this was followed by a downward trajectory, with gross profit falling to 2,618 million US dollars in 2021 and continuing to decline to 1,472 million US dollars by the end of 2023. This declining trend in gross profit suggests rising costs or decreasing efficiency.
- Gross Profit Margin
- The gross profit margin displayed a fluctuating pattern over the reviewed periods. In 2019, the margin was 23.67%, which improved significantly to 33.2% in 2020, showing enhanced profitability relative to sales. Following this peak, the margin declined sharply to 21.42% in 2021, further dropping to 19.65% in 2022, and reaching a low of 12.46% in 2023. The steady contraction in gross margin over the last three years highlights decreasing profitability efficiency and potential cost pressures affecting the company's core operations.
Operating Profit Margin
Newmont Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Operating Profit Margin, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Operating income (loss) ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several important trends concerning operating income, sales, and operating profit margin over the five-year period from 2019 to 2023.
- Operating Income (Loss)
- The operating income experienced significant fluctuations throughout the period. It started at 1,277 million USD in 2019, increased sharply to 2,806 million USD in 2020, then declined to 1,257 million USD in 2021. Following this, a steep decrease occurred, reaching 203 million USD in 2022 and resulting in a substantial operating loss of 1,700 million USD in 2023. This trend suggests increased volatility in operating profitability, culminating in a negative operating result in the most recent year.
- Sales
- Sales showed a generally upward trajectory from 2019 to 2021, rising from 9,740 million USD to 12,222 million USD. However, sales slightly receded in the last two years, registering 11,915 million USD in 2022 and 11,812 million USD in 2023. Despite the minor reduction in sales towards the end of the period, the values remained above the 2019 level, indicating relative stability in revenue generation over time.
- Operating Profit Margin
- The operating profit margin mirrored the pattern observed in operating income, with notable volatility. It rose substantially from 13.11% in 2019 to 24.41% in 2020, reflecting strong profitability that year. Subsequently, it declined sharply to 10.28% in 2021 and further to a very low 1.7% in 2022. In 2023, the margin turned negative, at -14.39%, consistent with the operating loss reported. This declining margin trend highlights deteriorating efficiency or increased costs relative to sales.
In summary, the period was marked by initial growth and peak profitability in 2020, followed by a downward trend in both operating income and profit margin, despite relatively stable sales. The negative operating income and margin in 2023 indicate significant operational challenges or increased expenses impacting the company’s financial performance.
Net Profit Margin
Newmont Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Newmont stockholders | ||||||
| Sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| Net Profit Margin, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net income (loss) attributable to Newmont stockholders ÷ Sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to Stockholders
- The net income remained relatively stable from 2019 to 2020, showing a slight increase from 2805 million USD to 2829 million USD. However, there was a significant decline in 2021, with net income dropping to 1166 million USD. The trend deteriorated further in subsequent years, turning negative to -429 million USD in 2022 and continuing its decline to -2494 million USD by the end of 2023.
- Sales
- Sales exhibited a steady upward trajectory from 2019 through 2021, increasing from 9740 million USD to 12222 million USD. Following this peak, sales experienced a slight decline in 2022 to 11915 million USD, and this downward trend continued marginally in 2023 with sales at 11812 million USD. Despite the decrease, sales figures remained relatively stable after 2021.
- Net Profit Margin
- The net profit margin followed a decreasing trend throughout the period. Starting at a healthy 28.8% in 2019, it dropped to 24.61% in 2020 and then sharply declined to 9.54% in 2021. The margin turned negative in 2022 at -3.6%, indicating losses relative to sales, and worsened further in 2023 to -21.11%, reflecting substantial profitability challenges despite relatively stable sales.
Return on Equity (ROE)
Newmont Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Newmont stockholders | ||||||
| Total Newmont stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| ROE, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net income (loss) attributable to Newmont stockholders ÷ Total Newmont stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to Newmont Stockholders
- The net income experienced a significant change over the observed period. It started strong at $2805 million in 2019 and remained relatively stable in 2020 at $2829 million. However, in 2021, there was a substantial decline to $1166 million, followed by a shift to negative values in 2022 and 2023, with losses of $429 million and $2494 million respectively. This trend indicates a worsening profitability position in the latter years.
- Total Newmont Stockholders' Equity
- The total stockholders' equity displayed variability across the years. It increased from $21,420 million in 2019 to $23,008 million in 2020, then decreased slightly to $22,022 million in 2021. The downward trend continued in 2022, reaching $19,354 million. Notably, there was a recovery in 2023, with equity rising significantly to $29,027 million, surpassing the initial levels observed in 2019 and 2020.
- Return on Equity (ROE)
- ROE showed a declining trajectory throughout the period. It began at 13.1% in 2019 and slightly decreased to 12.3% in 2020. A more pronounced drop occurred in 2021 with ROE at 5.29%. The return became negative in 2022 at -2.22% and further declined to -8.59% in 2023. This indicates that the company’s ability to generate profit from its equity deteriorated markedly, corresponding with the net income losses observed.
- Overall Analysis
- The financial data reveals a trend of decreasing profitability starting in 2021, with net income turning negative in the two most recent years. Despite this, stockholders’ equity showed resilience, ultimately increasing significantly in 2023, possibly due to capital injections or retained earnings adjustments not reflected in net income. The declining and then negative ROE underscores challenges in generating returns on equity, consistent with the downward profit trend. This combination suggests operational or market difficulties impacting earnings, although the equity base remains strong as of the last reported year.
Return on Assets (ROA)
Newmont Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Newmont stockholders | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Freeport-McMoRan Inc. | ||||||
| ROA, Industry | ||||||
| Materials | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net income (loss) attributable to Newmont stockholders ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to Newmont Stockholders
- The net income showed a positive trend from 2019 to 2020, increasing slightly from 2,805 million US dollars to 2,829 million US dollars. However, there was a significant decline in 2021 with net income dropping to 1,166 million US dollars. This downward trajectory continued into 2022 and 2023, where the company reported net losses of 429 million US dollars and 2,494 million US dollars respectively. The data indicates increasing financial difficulties or adverse conditions impacting profitability over these years.
- Total Assets
- Total assets demonstrated some fluctuation over the five-year period. The company’s assets rose from 39,974 million US dollars in 2019 to 41,369 million US dollars in 2020, before decreasing to 40,564 million US dollars in 2021 and further to 38,482 million US dollars in 2022. In 2023, there was a marked increase to 55,506 million US dollars, representing a substantial growth in asset base.
- Return on Assets (ROA)
- ROA followed a declining pattern consistent with the trend in net income. It decreased from 7.02% in 2019 to 6.84% in 2020, then sharply dropped to 2.87% in 2021. The ROA turned negative in 2022 at -1.11%, indicating the company's inability to generate profit from its assets. The downward trend intensified in 2023 with ROA deteriorating to -4.49%, reflecting a significant operational challenge and inefficient use of assets.