Advanced Micro Devices Inc (AMD)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 45.73% | 44.83% | 48.34% | 44.89% | 43.93% |
| Operating profit margin | 1.75% | 5.34% | 22.24% | 14.14% | 9.67% |
| Pretax margin | 2.22% | 5.07% | 22.41% | 13.22% | 5.70% |
| Net profit margin | 3.73% | 5.58% | 19.28% | 25.71% | 5.22% |
The profitability ratios of Advanced Micro Devices Inc have shown some fluctuations over the past five years. The gross profit margin has been relatively stable, hovering around the mid-40% range, indicating that the company has been able to maintain a healthy level of profitability on its core operations.
However, the operating profit margin has shown more variability, with a significant decline in 2023 compared to the previous years. This suggests that the company's operating expenses may have increased relative to its revenue in 2023, impacting its overall profitability.
The pretax margin also experienced fluctuation, reaching its peak in 2021 before declining in subsequent years. This indicates that while the company was able to generate strong profits before tax in 2021, this performance was not sustained in the following years.
In terms of net profit margin, Advanced Micro Devices Inc has shown a similar pattern of fluctuation, with a notable decrease in profitability in 2023 compared to 2021 and 2022. This could be a result of various factors affecting the company's bottom line, such as changes in expenses, taxes, or other financial variables.
Overall, the analysis of the profitability ratios suggests that Advanced Micro Devices Inc has faced some challenges in maintaining consistent levels of profitability in recent years, with notable fluctuations in its operating profit margin, pretax margin, and net profit margin. Investors and stakeholders may want to further investigate the reasons behind these fluctuations to assess the company's financial health and performance.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.59% | 1.87% | 29.37% | 15.28% | 10.47% |
| Return on assets (ROA) | 1.26% | 1.95% | 25.46% | 27.78% | 5.66% |
| Return on total capital | 1.07% | 2.25% | 49.47% | 21.52% | 14.07% |
| Return on equity (ROE) | 1.53% | 2.41% | 42.18% | 42.66% | 12.06% |
Advanced Micro Devices Inc's profitability ratios show a mixed performance over the past five years. Operating return on assets (Operating ROA) has decreased consistently from 29.37% in 2021 to 0.59% in 2023, indicating a decline in the company's ability to generate operating profits from its assets.
Return on assets (ROA) fluctuated over the years, with a peak at 27.78% in 2020 and a low of 1.26% in 2023. This variability suggests that AMD's efficiency in generating profits from its total assets has been inconsistent.
Return on total capital saw significant fluctuations as well, ranging from 49.47% in 2021 to 1.07% in 2023. This ratio reflects the company's ability to generate returns from both equity and debt investments, with the latest year showing a notable decline.
Return on equity (ROE) has also varied, with the highest point at 42.66% in 2020 and the lowest at 1.53% in 2023. ROE indicates how effectively the company is utilizing shareholders' equity to generate profits, and the downward trend in recent years is a concern for investors.
Overall, AMD's profitability ratios demonstrate a lack of stability and consistency in generating returns for shareholders and utilizing assets efficiently. Further analysis of the company's financial performance and strategic decisions may be needed to address these fluctuations and improve profitability in the future.