AbbVie Inc (ABBV)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 69.99% | 62.42% | 70.00% | 68.96% | 66.41% |
| Operating profit margin | 16.22% | 23.49% | 31.21% | 31.89% | 24.81% |
| Pretax margin | 6.60% | 11.51% | 23.21% | 23.11% | 7.42% |
| Net profit margin | 7.59% | 8.95% | 20.39% | 20.54% | 10.08% |
AbbVie Inc has shown a consistent improvement in its gross profit margin over the years, increasing from 66.41% in 2020 to 69.99% in 2024. This indicates that the company has been able to effectively control its cost of goods sold and generate higher profits on its sales.
In terms of operating profit margin, AbbVie Inc experienced a substantial increase from 24.81% in 2020 to 31.21% in 2022, before declining to 16.22% in 2024. This indicates that the company's operating expenses have been well managed, leading to higher operating profitability, although a recent decline in 2024 may signify potential challenges.
The pretax margin of AbbVie Inc also demonstrated a significant improvement from 7.42% in 2020 to 23.21% in 2022, before decreasing to 6.60% in 2024. This suggests that the company has been successful in optimizing its pre-tax earnings relative to its total revenue, although a recent decline in 2024 may raise concerns about the overall profitability.
Lastly, the net profit margin of AbbVie Inc increased from 10.08% in 2020 to 20.54% in 2021, but saw a decline to 7.59% in 2024. This indicates that the company's ability to control its expenses and generate profits after all costs have also fluctuated over the period.
Overall, AbbVie Inc has shown improvements in its profitability ratios, with some fluctuations in recent years. It may be essential for investors and stakeholders to closely monitor the company's financial performance and management of costs to ensure sustained profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.76% | 9.47% | 13.05% | 12.23% | 7.55% |
| Return on assets (ROA) | 3.17% | 3.61% | 8.53% | 7.88% | 3.07% |
| Return on total capital | 196.21% | 83.11% | 133.05% | 128.24% | 112.24% |
| Return on equity (ROE) | 128.66% | 46.94% | 68.60% | 74.91% | 35.30% |
AbbVie Inc's profitability ratios show varying trends over the five-year period from 2020 to 2024.
1. Operating return on assets (Operating ROA) has shown a general upward trend from 7.55% in 2020 to 13.05% in 2022, before declining slightly to 9.47% in 2023 and further to 6.76% in 2024. This indicates that AbbVie's operating performance in generating profits from its assets improved significantly from 2020 to 2022 but declined in the subsequent years.
2. Return on assets (ROA) also exhibited fluctuations, with a notable increase from 3.07% in 2020 to 8.53% in 2022, reflecting improved overall efficiency in asset utilization. However, there was a decline to 3.61% in 2023 and 3.17% in 2024, indicating a reversal in the trend of generating profit from total assets.
3. Return on total capital started at a high of 112.24% in 2020, increased to 133.05% in 2022, but significantly dropped in 2023 to 83.11%, before rebounding to 196.21% in 2024. This ratio reveals the company's ability to generate returns from both debt and equity capital, with the highest return observed in 2024.
4. Return on equity (ROE) demonstrated a similar pattern to Return on total capital, starting at 35.30% in 2020, peaking at 74.91% in 2021, and then declining to 46.94% in 2023. The ratio surged to 128.66% in 2024, showcasing an impressive recovery and profitability for the shareholders.
In conclusion, AbbVie Inc's profitability ratios show mixed performance over the years, with improvements in certain areas such as Operating return on assets and Return on equity in 2024. However, the fluctuations in Return on assets and Return on total capital indicate a need for the company to focus on maintaining and improving profitability across all aspects of its operations to ensure sustained financial performance.