Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Return on Equity (ROE) since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Debt
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Profitability Ratios (Summary)
SLB N.V., 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).
The financial indicators demonstrate a significant positive shift over the analyzed period, with notable improvements in profitability and returns.
- Gross Profit Margin
- There is a consistent upward trend in gross profit margin, increasing from 11.02% in 2020 to 20.56% in 2024. This suggests enhanced efficiency in production or service delivery, resulting in higher profitability from core activities.
- Operating Profit Margin
- The operating profit margin showed a substantial turnaround, moving from a deep negative margin of -46.62% in 2020 to a positive margin of 15.99% in 2024, peaking at 16.43% in 2023. This indicates an improvement in controlling operating expenses relative to revenue, leading to better operational profitability.
- Net Profit Margin
- The net profit margin has also improved markedly, from -44.57% in 2020 to 12.29% in 2024, demonstrating successful management of overall costs, including taxes and interest. However, a slight decline is noticeable in the last year, signaling potential emerging pressures on net profitability.
- Return on Equity (ROE)
- ROE experienced a dramatic recovery from a negative -87.13% in 2020 to a positive 21.11% in 2024. This reflects the company’s ability to generate profit from shareholders' equity has strengthened substantially, indicating improved financial health and effective equity utilization.
- Return on Assets (ROA)
- Similarly, ROA improved from -24.79% in 2020 to 9.12% in 2024. This consistent growth signifies enhanced efficiency in asset utilization to generate earnings, confirming the company’s stronger operational performance and asset management over time.
Overall, the data reveals a strong recovery and progressive enhancement in the company’s profitability and returns since 2020, transitioning from significant losses to sustained positive margins and returns by 2024. The slight dip in net profit margin in the final year warrants monitoring but does not detract from the overall positive trend observed.
Return on Sales
Return on Investment
Gross Profit Margin
SLB N.V., gross profit margin calculation
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross margin | ||||||
| Revenue | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
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 margin ÷ Revenue
= 100 × ÷ =
The financial data indicates a positive trajectory in the company's performance over the observed periods. Analyzing the revenue figures reveals a growth trend, with revenue increasing from 23,601 million US dollars in 2020 to 36,289 million US dollars in 2024. This suggests a significant expansion in the company's business operations and market presence.
Gross margin has also shown consistent improvement, rising from 2,601 million US dollars in 2020 to 7,460 million US dollars in 2024. The gross margin's steady increase supports the indication of enhanced profitability and operational efficiency.
Furthermore, the gross profit margin percentage demonstrates a rising trend. Starting at 11.02% in 2020, it increases to 20.56% by 2024. This improvement illustrates that the company is not only growing in terms of absolute revenue but is also becoming more effective in managing the costs associated with generating revenue, resulting in better profitability ratios.
- Revenue
- Exhibited growth from 23,601 million US dollars in 2020 to 36,289 million US dollars in 2024, indicating expanding business activity.
- Gross Margin
- Increased from 2,601 million US dollars in 2020 to 7,460 million US dollars in 2024, reflecting improved absolute profitability.
- Gross Profit Margin Percentage
- Rose from 11.02% to 20.56% over the five-year period, showing enhanced cost control or pricing power relative to revenue.
Overall, the data highlights a company that is growing both in scale and in efficiency, managing to increase its revenues and its margin rates simultaneously over the five-year span analyzed.
Operating Profit Margin
SLB N.V., operating profit margin calculation, comparison to benchmarks
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 (loss) ÷ Revenue
= 100 × ÷ =
The analyzed financial data reveals significant shifts in the company's operational performance and revenue generation over the five-year period ending December 31, 2024.
- Operating Income
- There is a marked improvement in operating income from a substantial loss of US$11,002 million in 2020 to positive values in succeeding years. Starting in 2021, the company recorded an operating income of US$2,765 million, which steadily increased to US$5,804 million by 2024. This trend indicates a strong recovery and enhanced operational efficiency over the period.
- Revenue
- Revenue exhibited a generally upward trajectory, rising from US$23,601 million in 2020 to US$36,289 million in 2024. Although there was a slight dip in 2021 to US$22,929 million, revenue rebounded strongly thereafter, growing substantially each year. This growth suggests successful sales expansion or market penetration efforts.
- Operating Profit Margin
- The operating profit margin experienced a dramatic turnaround from a negative margin of -46.62% in 2020 to positive margins in subsequent years. By 2021, the margin had improved to 12.06%, increasing to a peak of 16.43% in 2023 before a slight decline to 15.99% in 2024. This improvement highlights better cost management or pricing strategy, resulting in enhanced profitability relative to revenue.
Overall, the company demonstrated a strong financial performance recovery and growth across the analyzed period, characterized by increasing revenues and shifting from a significant operating loss to sustained operating profits, supported by improved operational margins.
Net Profit Margin
SLB N.V., net profit margin calculation, comparison to benchmarks
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 income (loss) attributable to SLB ÷ Revenue
= 100 × ÷ =
- Revenue Trends
- Revenue demonstrated a consistent upward trend over the analyzed periods. Starting at US$23,601 million in 2020, it slightly decreased in 2021 to US$22,929 million but experienced substantial growth thereafter, reaching US$28,091 million in 2022, US$33,135 million in 2023, and US$36,289 million in 2024. This indicates a strong recovery and expansion in the company’s sales or services.
- Net Income (Loss) Attributable to SLB
- The net income experienced a significant turnaround. In 2020, the company reported a large net loss of US$10,518 million. From 2021 onwards, net income turned positive, rising to US$1,881 million in 2021, US$3,441 million in 2022, US$4,203 million in 2023, and US$4,461 million in 2024. The progressive increase suggests improving profitability and operational efficiency.
- Net Profit Margin
- The net profit margin mirrored the trends observed in net income. Starting with a significant negative margin of -44.57% in 2020, it improved drastically to 8.2% in 2021 and continued to increase steadily to 12.25% in 2022. Margins slightly improved to 12.68% in 2023 before a marginal decline to 12.29% in 2024. The overall trend indicates enhanced profitability relative to revenue, stabilizing at around 12% in the most recent years.
- Overall Financial Performance
- The company experienced a strong recovery from a considerable loss position in 2020 to consistent profitability in subsequent years. The steady growth in revenue combined with improved net income and stable profit margins suggests effective management strategies and favorable market conditions. The slight decline in net profit margin in 2024 warrants monitoring but does not negate the positive overall trajectory.
Return on Equity (ROE)
SLB N.V., ROE calculation, comparison to benchmarks
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 income (loss) attributable to SLB ÷ Total SLB stockholders’ equity
= 100 × ÷ =
The financial data reveals notable progress in profitability and equity metrics over the five-year period.
- Net Income (Loss) Attributable to SLB
- There was a significant turnaround from a substantial loss of approximately $10.5 billion in 2020 to consistent profits in subsequent years. Net income improved to $1.9 billion in 2021, continued increasing to $3.4 billion in 2022, then $4.2 billion in 2023, and reached $4.5 billion in 2024. This trend indicates a strong recovery and growing profitability.
- Total SLB Stockholders’ Equity
- Stockholders’ equity showed steady growth throughout the period, rising from $12.1 billion in 2020 to $21.1 billion by the end of 2024. The consistent increase suggests effective capital retention and possible value creation for shareholders.
- Return on Equity (ROE)
- ROE improved dramatically from a negative return of -87.13% in 2020 to positive and increasing returns in the following years, reaching 21.11% by 2024. The upward trajectory in ROE reflects enhanced operational efficiency and profitable use of equity capital over time.
Overall, the company experienced a strong financial recovery starting in 2021, with improving income, equity base, and profitability ratios sustained through 2024. This progression points to improved financial health and effective management actions implemented after 2020.
Return on Assets (ROA)
SLB N.V., ROA calculation, comparison to benchmarks
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 income (loss) attributable to SLB ÷ Total assets
= 100 × ÷ =
The financial data reveals notable changes and trends over the five-year period from 2020 to 2024.
- Net Income (Loss) Attributable to SLB
- The company experienced a significant turnaround in net income over the period. In 2020, there was a substantial net loss of approximately US$10.5 billion. However, starting in 2021, the company returned to profitability with a net income of US$1.88 billion, which steadily increased each year to reach US$4.46 billion by the end of 2024. This indicates a pronounced improvement in the company’s profitability and operational performance.
- Total Assets
- Total assets exhibited moderate fluctuations and overall growth. After a slight decrease from US$42.4 billion in 2020 to US$41.5 billion in 2021, total assets rebounded and increased consistently to nearly US$48 billion in 2023 and further to US$48.9 billion in 2024. This reflects a strategic accumulation or retention of resources and possibly investments contributing to asset growth.
- Return on Assets (ROA)
- The return on assets metric showed a remarkable recovery and positive upward trend. Starting with a deeply negative ROA of -24.79% in 2020, the company improved significantly to a positive 4.53% in 2021. ROA continued to rise steadily, reaching 9.12% by the end of 2024. This suggests enhanced efficiency in utilizing assets to generate profit, correlating with the recovery and growth in net income.
In summary, the company demonstrated a strong financial turnaround characterized by a shift from heavy losses to sustained profitability, accompanied by asset growth and improved asset efficiency. The trends indicate effective management strategies leading to enhanced financial health and operational performance over the analyzed period.