Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to Book Value (P/BV) since 2008
- Analysis of Revenues
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Profitability Ratios (Summary)
Philip Morris International Inc., profitability ratios
Based on: 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), 10-K (reporting date: 2020-12-31).
- Gross Profit Margin
- The gross profit margin exhibited some fluctuations over the analyzed period. It increased from 66.65% in 2020 to 68.06% in 2021, indicating an improvement in the company’s efficiency in managing production costs relative to revenue. However, it then declined to 64.1% in 2022 and further decreased slightly to 63.35% in 2023 before recovering moderately to 64.81% in 2024. Overall, despite the recent slight recovery, the margin in 2024 remained below the peak observed in 2021.
- Operating Profit Margin
- The operating profit margin showed a downward trend over the period. Starting at 40.66% in 2020, it rose slightly to 41.32% in 2021. Subsequently, there was a notable decline to 38.56% in 2022 and a steeper drop to 32.85% in 2023. In 2024, the margin improved somewhat to 35.38%, yet it remained significantly below the earlier highs. This pattern suggests increasing operating costs or other operational challenges affecting profitability.
- Net Profit Margin
- The net profit margin mirrored the downward trajectory observed in operating margin, beginning at 28.08% in 2020 and rising marginally to 29% in 2021. Starting in 2022, the margin decreased to 28.49%, followed by a more pronounced fall to 22.21% in 2023, and then declined further to 18.63% in 2024. This consistent decline points to pressure on overall profitability, potentially from increased expenses, lower revenue growth, or higher tax or interest burdens.
- Return on Assets (ROA)
- Return on assets showed variability with an initial improvement from 17.98% in 2020 to 22.06% in 2021, reflecting better asset utilization in the earlier part of the period. However, ROA then decreased significantly to 14.67% in 2022, followed by further declines to 11.96% in 2023 and 11.42% in 2024. The decline in ROA suggests diminishing effectiveness in generating profits from the company’s asset base over the latter years.
- Return on Equity (ROE)
- No data were available for return on equity across the analyzed periods, preventing any assessment of shareholder returns through this metric.
Return on Sales
Return on Investment
Gross Profit Margin
Philip Morris International Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Revenues
- The net revenues demonstrate a steady upward trend from 2020 through 2024. Starting at 28,694 million USD in 2020, revenues increased annually, reaching 37,878 million USD by 2024. The growth appears consistent, with the most notable increase occurring between 2022 and 2023.
- Gross Profit
- Gross profit presents an overall increasing pattern, beginning at 19,125 million USD in 2020 and rising to 24,549 million USD in 2024. There is a slight decline observed in 2022 compared to 2021, but the upward trend resumes afterwards, indicating recovery and continued growth in profitability.
- Gross Profit Margin
- The gross profit margin percentage exhibits some fluctuation over the five-year period. It peaked at 68.06% in 2021, followed by a decline to 64.1% in 2022 and a further dip to 63.35% in 2023. However, there is a modest improvement to 64.81% in 2024. Despite these fluctuations, the margin remains relatively stable around the mid-60 percent range.
- Overall Analysis
- The company shows robust revenue growth across the period analyzed. Although gross profit margin experienced some variability, particularly a noticeable downturn starting in 2022, the gross profit in absolute terms continued to increase, reflecting effective cost management in relation to rising sales. The improvement in gross profit margin in the final year suggests positive adjustments or efficiencies were implemented to enhance profitability.
Operating Profit Margin
Philip Morris International Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Operating Profit Margin, Industry | ||||||
| Consumer Staples | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Operating income ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating income
- The operating income exhibited fluctuations over the observed period. Starting at $11,668 million in 2020, it increased to $12,975 million in 2021 before experiencing a decline to $12,246 million in 2022 and further to $11,556 million in 2023. However, there was a notable recovery in 2024, with operating income rising to $13,402 million, surpassing the earlier years' levels.
- Net revenues
- Net revenues demonstrated a consistent upward trend throughout the period. The values increased from $28,694 million in 2020 to $31,405 million in 2021, then marginally to $31,762 million in 2022. This growth accelerated in 2023 and 2024, reaching $35,174 million and $37,878 million, respectively, indicating steady market expansion or increased sales volumes.
- Operating profit margin
- The operating profit margin showed variability with a declining trend from 40.66% in 2020 to 38.56% in 2022. There was a more pronounced decrease in 2023 to 32.85%, followed by a slight recovery to 35.38% in 2024. This pattern suggests increasing cost pressures or changes in cost structure, despite growing revenues.
- Overall insights
- The data reveals that while net revenues have steadily grown each year, operating income and profit margins have been more volatile. The operating income peak in 2021 was not sustained initially but recovered effectively by 2024. The decline in operating profit margin across the middle years, especially in 2023, juxtaposed with growing revenues, points to rising operating expenses or changes affecting profitability. The partial rebound in margin in 2024 aligns with the increase in operating income, indicating improved cost management or pricing strategies. This mixed pattern suggests the company is navigating challenges affecting operational efficiency amid expanding sales.
Net Profit Margin
Philip Morris International Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to PMI | ||||||
| Net revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Net Profit Margin, Industry | ||||||
| Consumer Staples | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net earnings attributable to PMI ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings Attributable to PMI
- Net earnings peaked in 2021 at 9,109 million US dollars but then displayed a downward trend through subsequent years, decreasing to 7,057 million US dollars by the end of 2024. This represents a significant decline of approximately 22.5% from the 2021 peak to 2024.
- Net Revenues
- Net revenues showed a consistent upward trajectory over the analyzed period. Starting at 28,694 million US dollars in 2020, revenues increased steadily each year, reaching 37,878 million US dollars in 2024. This growth corresponds to an approximate total increase of 32% over the five-year span.
- Net Profit Margin
- The net profit margin followed a declining trend after 2021. Initially, the margin was relatively stable around 28-29% during 2020-2022 but experienced a marked decrease in the following years, dropping to 18.63% by the end of 2024. This indicates a reduction in profitability relative to revenue despite the revenue growth.
- Overall Analysis
- The financial data exhibits an increasing top-line performance, signified by rising net revenues; however, it contrasts with declining profitability and net earnings. The decrease in net profit margin alongside the growth in revenues suggests increasing costs, reduced pricing power, or other operational challenges impacting the company's profit conversion efficiency. This divergence warrants further investigation into cost structure, market conditions, and competitive dynamics affecting profitability.
Return on Equity (ROE)
Philip Morris International Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to PMI | ||||||
| Total PMI stockholders’ deficit | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| ROE, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| ROE, Industry | ||||||
| Consumer Staples | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net earnings attributable to PMI ÷ Total PMI stockholders’ deficit
= 100 × ÷ =
2 Click competitor name to see calculations.
The analysis of the financial data over the five-year period reveals several notable trends regarding profitability and the equity position.
- Net Earnings Attributable to PMI
- The net earnings demonstrate a fluctuating pattern over the years. From 2020 to 2021, there was a significant increase from 8,056 million USD to 9,109 million USD, indicating improved profitability. However, this upward trend did not sustain as earnings slightly decreased in 2022 to 9,048 million USD. The decline became more pronounced in 2023, dropping to 7,813 million USD, and continued downward to 7,057 million USD in 2024. This trend suggests challenges in maintaining earnings growth, possibly due to market conditions, operational performance, or other external factors affecting profitability.
- Total PMI Stockholders’ Deficit
- Stockholders’ deficit, which reflects the negative equity position, shows some volatility. In 2020, the deficit was at -12,567 million USD, which improved by 2021 to -10,106 million USD and further to -8,957 million USD in 2022, indicating a reduction in negative equity. However, this improvement reversed in 2023 with the deficit increasing again to -11,225 million USD and further deteriorating to -11,750 million USD in 2024. This suggests a weakening of the company’s equity base, potentially impacted by losses, dividend payments, share repurchases, or other financial activities adversely affecting equity.
- Return on Equity (ROE)
- Return on equity data is not provided for any of the periods analyzed, which limits the ability to assess how effectively the company generated profits from its equity.
Overall, the company experienced an initial increase in net earnings followed by a consistent decline over the last three years. Concurrently, the stockholders’ deficit improved for two years before deteriorating again, signaling volatility in the equity structure. The absence of ROE data restricts deeper insight into the relationship between profitability and equity efficiency.
Return on Assets (ROA)
Philip Morris International Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings attributable to PMI | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| ROA, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| ROA, Industry | ||||||
| Consumer Staples | ||||||
Based on: 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), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net earnings attributable to PMI ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings Attributable to PMI
- The net earnings show an initial increase from 8,056 million US dollars in 2020 to a peak of 9,109 million in 2021. Following this peak, earnings slightly decreased to 9,048 million in 2022, and then experienced a more pronounced decline in 2023 and 2024, reaching 7,813 million and 7,057 million respectively. This indicates a downward trend in profitability over the last two years despite earlier growth.
- Total Assets
- Total assets decreased from 44,815 million US dollars in 2020 to 41,290 million in 2021, reflecting a contraction in the asset base during this period. However, there was a significant increase in 2022, with total assets rising sharply to 61,681 million and continuing to grow to 65,304 million in 2023. By 2024, total assets slightly declined to 61,784 million but remained substantially higher than the initial levels in 2020 and 2021. This suggests periods of asset expansion possibly related to acquisitions or other investments.
- Return on Assets (ROA)
- ROA peaked at 22.06% in 2021, consistent with the highest net earnings relative to assets. Thereafter, ROA declined steadily, dropping to 14.67% in 2022 and further decreasing to 11.96% in 2023 and 11.42% in 2024. This trend indicates reduced efficiency in generating profits from the asset base over time, which aligns with the falling net earnings despite the increased asset base.
- Overall Analysis
- The data illustrates a scenario where the company improved profitability and asset size from 2020 to 2021 but subsequently experienced a divergence in performance metrics. While total assets expanded significantly from 2021 through 2023, profitability as measured by net earnings and ROA declined in the same period. This suggests challenges in effectively utilizing the enlarged asset base to sustain or grow earnings, potentially pointing to operational or market-related pressures affecting earnings performance.