Advanced Micro Devices Inc (AMD)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 49.00% | 45.73% | 44.83% | 48.34% | 44.89% |
| Operating profit margin | 7.32% | 1.75% | 5.34% | 22.24% | 14.14% |
| Pretax margin | 7.79% | 2.22% | 5.07% | 22.41% | 13.22% |
| Net profit margin | 6.32% | 3.73% | 5.58% | 19.28% | 25.71% |
The profitability ratios of Advanced Micro Devices Inc have shown some fluctuations over the years. The gross profit margin has generally trended upwards, increasing from 44.89% in 2020 to 49.00% in 2024, indicating the company's ability to efficiently produce its products.
In terms of operating profit margin, there was a significant increase from 14.14% in 2020 to 22.24% in 2021, followed by some volatility in the following years. This suggests that the company has been able to improve its operational efficiency, although there have been some challenges in maintaining consistent profitability.
The pretax margin also exhibited fluctuations, with a peak of 22.41% in 2021 followed by a decline in the subsequent years. This indicates that while the company was able to generate higher profits before tax in 2021, its profitability levels fluctuated in the following years.
Lastly, the net profit margin, which represents the company's bottom line profitability, decreased from 25.71% in 2020 to 6.32% in 2024. This downward trend indicates that after accounting for all expenses, the company's profit margin has decreased over the years, signaling potential challenges in managing costs or generating sustainable bottom-line growth.
Overall, while Advanced Micro Devices Inc has shown improvements in certain profitability metrics, such as gross profit margin and operating profit margin, there are areas of concern regarding the stability of its net profit margin and overall bottom-line profitability. Further analysis of the company's cost structure and revenue generation strategies may be needed to address these profitability fluctuations effectively.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.74% | 0.59% | 1.87% | 29.37% | 15.28% |
| Return on assets (ROA) | 2.37% | 1.26% | 1.95% | 25.46% | 27.78% |
| Return on total capital | 3.57% | 1.07% | 2.25% | 49.47% | 21.52% |
| Return on equity (ROE) | 2.85% | 1.53% | 2.41% | 42.18% | 42.66% |
Based on the provided data on profitability ratios for Advanced Micro Devices Inc, we can observe the following trends:
1. Operating Return on Assets (Operating ROA):
- The Operating ROA has shown fluctuations over the years, with a significant increase from 2020 to 2021, followed by a decline in subsequent years, indicating varying operational efficiency and asset utilization.
2. Return on Assets (ROA):
- The ROA has also displayed fluctuations, with a notable decrease in 2021 compared to 2020, followed by relatively low levels in 2022 and 2023. There was a slight improvement in 2024, showing the company's ability to generate profits from its assets.
3. Return on Total Capital:
- The Return on Total Capital demonstrates a similar pattern of variability, with a substantial increase in 2021, indicating efficient capital utilization. However, there was a subsequent decline, suggesting challenges in maintaining high returns on total capital.
4. Return on Equity (ROE):
- The ROE has shown a similar trend to ROA, with a peak in 2020 followed by decreasing levels in the following years. This indicates that shareholders' returns have been affected by the company's profitability fluctuations.
Overall, the profitability ratios of Advanced Micro Devices Inc reveal a mix of positive and negative trends, highlighting the company's performance in generating profits relative to its assets, capital, and equity. The fluctuations in these ratios suggest varying levels of operational efficiency, asset utilization, and capital management over the years.