Adobe Systems Incorporated (ADBE)
Profitability ratios
Return on sales
| Nov 29, 2024 | Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 89.04% | 87.87% | 87.70% | 88.18% | 86.62% |
| Operating profit margin | 31.35% | 34.26% | 34.64% | 36.76% | 32.93% |
| Pretax margin | 32.23% | 35.03% | 34.12% | 36.14% | 32.45% |
| Net profit margin | 25.85% | 27.97% | 27.01% | 30.55% | 40.88% |
Adobe Systems Incorporated has shown a consistent and strong gross profit margin over the years, ranging between 86.62% to 89.04%. This indicates that the company is efficiently managing its production costs and generating a high percentage of revenue after deducting the cost of goods sold.
In terms of operating profit margin, Adobe has demonstrated a mixed performance with fluctuations ranging from 31.35% to 36.76%. Although there was a slight decrease in the operating profit margin in the most recent year, the company has maintained a relatively healthy level of profitability after accounting for operating expenses.
The pretax margin of Adobe has also varied over the years, but it has generally remained within a narrow range of 32.23% to 36.14%. This indicates that the company has been effective in managing its operating expenses and generating profits before accounting for taxes.
However, the net profit margin of Adobe has displayed a decreasing trend from 40.88% in 2020 to 25.85% in 2024. This decline suggests that the company's profitability after all expenses, including interest and taxes, has decreased over the years, which may warrant further investigation into the factors impacting the bottom line.
Overall, while Adobe's gross profit margin and operating profit margin have been relatively stable, the declining trend in net profit margin raises some concerns about the company's overall profitability and efficiency in converting revenue to bottom-line earnings. Further analysis of cost management and revenue generation strategies may be necessary to address this decrease in profitability.
Return on investment
| Nov 29, 2024 | Dec 1, 2023 | Dec 2, 2022 | Dec 3, 2021 | Nov 27, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 22.30% | 22.33% | 22.45% | 21.30% | 17.45% |
| Return on assets (ROA) | 18.39% | 18.23% | 17.51% | 17.70% | 21.66% |
| Return on total capital | 47.79% | 41.85% | 43.56% | 39.32% | 32.36% |
| Return on equity (ROE) | 39.42% | 32.86% | 33.85% | 32.59% | 39.66% |
The profitability ratios of Adobe Systems Incorporated show a positive trend over the years, indicating improving efficiency in generating profits from assets and capital.
1. Operating Return on Assets (Operating ROA): This ratio increased steadily from 17.45% in November 2020 to 22.30% in November 2024, reflecting the company's ability to generate operating income relative to its total assets.
2. Return on Assets (ROA): ROA initially peaked at 21.66% in November 2020 but showed some fluctuations before reaching 18.39% in November 2024. This ratio indicates how well the company is utilizing its assets to generate profits.
3. Return on Total Capital: The return on total capital consistently improved from 32.36% in November 2020 to 47.79% in November 2024, suggesting effective use of both debt and equity capital to generate returns.
4. Return on Equity (ROE): While ROE fluctuated slightly over the years, it remained relatively high, reaching 39.42% in November 2024. This ratio highlights the company's ability to generate profits for its shareholders relative to their equity investment.
Overall, Adobe Systems Incorporated demonstrated a strong profitability performance, as indicated by the upward trend in these key ratios, reflecting efficient management of assets, capital, and equity to drive profitability.