Applied Materials Inc (AMAT)
Profitability ratios
Return on sales
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 47.46% | 47.13% | 46.87% | 47.81% | 45.35% |
| Operating profit margin | 28.95% | 29.13% | 30.43% | 30.18% | 25.73% |
| Pretax margin | 30.00% | 29.37% | 29.70% | 29.66% | 24.56% |
| Net profit margin | 26.41% | 26.09% | 25.50% | 25.79% | 21.34% |
Based on the provided data, we can analyze the profitability ratios of Applied Materials Inc over the past five years.
1. Gross Profit Margin: Applied Materials Inc has maintained a relatively stable gross profit margin over the period, ranging from 45.35% in 2020 to 47.81% in 2021. This indicates the company's ability to efficiently control its production costs and generate profits from its core operations.
2. Operating Profit Margin: The operating profit margin has also been consistent, with a slight fluctuation from 25.73% in 2020 to 30.43% in 2022. This ratio reflects the company's efficiency in managing its operating expenses and generating profits before interest and taxes.
3. Pretax Margin: The pretax margin has shown a positive trend over the years, increasing from 24.56% in 2020 to 30.00% in 2024. This indicates that Applied Materials Inc has been able to improve its profitability before accounting for taxes, possibly through effective cost management or revenue growth strategies.
4. Net Profit Margin: The net profit margin, which represents the bottom line profitability after all expenses including taxes, has also shown improvement over the years. The company's net profit margin ranged from 21.34% in 2020 to 26.41% in 2024, indicating the company's ability to generate profits per dollar of revenue.
In conclusion, Applied Materials Inc has demonstrated efficiency in managing its costs and generating profits over the past five years, as evidenced by the consistent or improving profitability ratios across gross profit margin, operating profit margin, pretax margin, and net profit margin.
Return on investment
| Oct 27, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Oct 25, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 22.86% | 24.91% | 29.14% | 26.68% | 19.53% |
| Return on assets (ROA) | 20.86% | 22.31% | 24.41% | 22.80% | 16.19% |
| Return on total capital | 32.16% | 36.47% | 44.34% | 39.59% | 27.49% |
| Return on equity (ROE) | 37.77% | 41.94% | 53.51% | 48.08% | 34.21% |
Profitability ratios are essential metrics to evaluate a company's ability to generate profits relative to its assets, capital, and equity.
Applied Materials Inc's profitability ratios have shown a consistent positive trend over the past five years. The Operating Return on Assets (Operating ROA) decreased from 19.53% in 2020 to 22.86% in 2024, indicating that the company is effectively managing its assets to generate operating profits.
Similarly, the Return on Assets (ROA) increased from 16.19% in 2020 to 20.86% in 2024, demonstrating Applied Materials Inc's ability to efficiently utilize its assets to generate overall profitability.
The Return on Total Capital also exhibited a positive trend, rising from 27.49% in 2020 to 32.16% in 2024. This metric reflects the company's success in generating returns for both debt and equity holders through its operations.
Furthermore, the Return on Equity (ROE) consistently improved from 34.21% in 2020 to 37.77% in 2024, highlighting Applied Materials Inc's ability to generate returns for its shareholders based on their invested equity.
Overall, Applied Materials Inc's profitability ratios indicate a strong performance and effective management of its resources to generate profits over the five-year period.