Abbott Laboratories (ABT)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 55.41% | 55.18% | 56.15% | 56.97% | 56.65% |
| Operating profit margin | 16.27% | 16.15% | 19.16% | 19.56% | 15.48% |
| Pretax margin | 16.72% | 16.61% | 19.03% | 19.06% | 14.36% |
| Net profit margin | 31.95% | 14.27% | 15.88% | 16.42% | 12.99% |
Abbott Laboratories has shown a stable and healthy gross profit margin over the past five years, ranging between 55.18% and 56.97%. This indicates the company has been able to effectively manage its production costs and maintain a strong margin on its products.
The operating profit margin has increased from 15.48% in 2020 to 19.16% in 2022 before slightly declining to 16.27% in 2024. This suggests that Abbott has been efficient in controlling its operating expenses and generating profits from its core operations.
The pretax margin has also shown a positive trend, starting at 14.36% in 2020 and peaking at 19.06% in 2021 and 2022. Despite a slight decrease in the following years, the company has maintained a healthy margin above 16% each year, indicating sound financial management.
Net profit margin has been notably variable, starting at 12.99% in 2020 and increasing to 16.42% in 2021 before dropping in the subsequent years. The significant spike to 31.95% in 2024 signifies a substantial increase in Abbott's bottom-line profitability in that year.
Overall, Abbott Laboratories has demonstrated strong profitability performance with consistent gross profit margins, improving operating profit margins, and respectable pretax margins. Despite some fluctuations in net profit margins, the company has managed to achieve remarkable profitability levels, especially in 2024.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.38% | 8.85% | 11.23% | 11.20% | 7.38% |
| Return on assets (ROA) | 16.46% | 7.82% | 9.31% | 9.40% | 6.20% |
| Return on total capital | 15.98% | 19.07% | 24.84% | 25.71% | 16.66% |
| Return on equity (ROE) | 28.12% | 14.83% | 18.90% | 19.75% | 13.71% |
Based on the provided data for Abbott Laboratories, we can analyze the profitability ratios as follows:
1. Operating Return on Assets (Operating ROA):
- The Operating ROA increased from 7.38% in December 2020 to 11.20% in December 2021 and slightly further to 11.23% in December 2022. It then decreased to 8.85% in December 2023 and further to 8.38% in December 2024. The company's operating performance in generating profits from its assets improved initially but saw a slight decline in the later years.
2. Return on Assets (ROA):
- The ROA also exhibited an increasing trend, starting at 6.20% in December 2020, gradually rising to 9.40% in December 2021 and 9.31% in December 2022. There was a dip to 7.82% in December 2023 but a significant jump to 16.46% in December 2024, indicating a strong performance in utilizing its assets to generate profits.
3. Return on Total Capital:
- The Return on Total Capital ratio for Abbott Laboratories saw a consistent growth from 16.66% in December 2020 to 25.71% in December 2021 and 24.84% in December 2022. However, it declined to 19.07% in December 2023 and further to 15.98% in December 2024. This ratio measures the company's overall profitability in relation to its total capital employed.
4. Return on Equity (ROE):
- The ROE increased significantly from 13.71% in December 2020 to 19.75% in December 2021 and 18.90% in December 2022. There was a drop to 14.83% in December 2023 but a remarkable rise to 28.12% in December 2024, suggesting that the company was able to generate higher returns for its shareholders during the period.
Overall, Abbott Laboratories showed overall improvement in profitability ratios over the years, with some fluctuations observed in certain ratios in the latter years. The company demonstrated effective utilization of its assets and capital to generate profits, contributing to enhanced shareholder value.