Agilent Technologies Inc (A)
Profitability ratios
Return on sales
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 19.16% | 26.38% | 23.41% | 17.81% | 21.27% |
| Operating profit margin | 19.90% | 23.89% | 21.60% | 16.05% | 18.55% |
| Pretax margin | 19.74% | 22.20% | 21.81% | 15.97% | 18.12% |
| Net profit margin | 18.28% | 18.51% | 19.40% | 13.64% | 21.11% |
Agilent Technologies Inc.'s profitability ratios reveal a trend of fluctuations over the past five years. In terms of gross profit margin, the company experienced a decline from 54.33% in 2019 to 50.71% in 2023. This suggests a potential decrease in the efficiency of production and operations. However, it is essential to note that the gross profit margin remained relatively stable within a narrow range of 50.71% to 54.35% over the last five years, indicating consistent cost management and pricing strategies.
Moving on to the operating profit margin, the trend also indicates fluctuations, with a decrease from 23.63% in 2022 to 19.76% in 2023. This suggests that Agilent's operating expenses may have increased compared to the previous year. However, the fluctuations in operating profit margin are relatively small across the five years, indicating stable operational efficiency.
The pretax margin decreased from 21.96% in 2022 to 19.60% in 2023. This trend suggests that Agilent's pre-tax income has decreased in relation to sales. The narrow range of fluctuations in the pretax margin from 15.77% to 21.96% over the five years indicates consistent management of operating expenses and non-operating items in relation to the company's revenue.
In terms of net profit margin, Agilent experienced a noticeable decrease from 20.74% in 2019 to 18.15% in 2023. This indicates that after accounting for all expenses, including taxes, the company's net income in relation to sales has declined. The significant fluctuations in net profit margin over the last five years suggest potential variations in tax expenses and other non-operating items impacting the company's bottom-line performance.
In conclusion, the profitability ratios of Agilent Technologies Inc. demonstrate fluctuations in the company's margins over the past five years. While the gross profit margin remained relatively stable, the operating, pretax, and net profit margins showed varying degrees of decline. These trends warrant further investigation into the company's cost management, pricing strategies, operational efficiency, and non-operating expenses to provide a comprehensive assessment of Agilent's overall profitability.
Return on investment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 12.54% | 15.36% | 12.58% | 8.79% | 9.96% |
| Return on assets (ROA) | 11.52% | 11.91% | 11.30% | 7.47% | 11.33% |
| Return on total capital | 24.53% | 29.93% | 17.75% | 12.85% | 14.39% |
| Return on equity (ROE) | 21.21% | 23.64% | 22.45% | 14.75% | 22.56% |
Agilent Technologies Inc.'s profitability ratios provide insight into the company's ability to generate profit from its assets and capital. Let's analyze these ratios to understand Agilent's financial performance over the past five years.
1. Operating return on assets (Operating ROA):
Operating ROA measures the company's operating income generated per dollar of assets. Agilent's Operating ROA has shown a fluctuating trend over the past five years, ranging from 8.79% in 2020 to 15.36% in 2022. The recent ratio of 12.54% for 2023 indicates a healthy performance, reflecting the company's efficient use of its assets to generate operating income.
2. Return on assets (ROA):
ROA measures the company's net income generated per dollar of assets. Agilent's ROA has also shown variability, with a low of 7.47% in 2020 and a high of 11.91% in 2022. The 2023 ROA of 11.52% indicates the company's ability to consistently generate net income from its assets, although there has been a slight decrease from the previous year.
3. Return on total capital:
This ratio measures the return generated from all of the company's capital, including both equity and debt. Agilent's return on total capital has fluctuated over the years, with a range from 11.70% in 2020 to 20.04% in 2022. The 2023 ratio of 15.73% suggests a solid return on the company's total capital, indicating efficient use of both equity and debt to generate returns for investors.
4. Return on equity (ROE):
ROE measures the return generated from the shareholders' equity. Agilent's ROE has varied, with the lowest at 14.75% in 2020 and the highest at 23.64% in 2022. The 2023 ROE of 21.21% indicates a strong return on equity, reflecting the company's ability to generate profits from shareholders' investments.
Overall, Agilent Technologies Inc. has demonstrated a generally sound financial performance over the past five years, as indicated by the profitability ratios. The company has efficiently utilized its assets and capital to generate profits, providing a favorable return for both shareholders and investors. However, the fluctuations in these ratios also suggest that the company's performance may be sensitive to changes in operating conditions and economic factors.