Broadcom Inc (AVGO)
Profitability ratios
Return on sales
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 68.93% | 66.55% | 61.36% | 56.58% | 55.24% |
| Operating profit margin | 45.25% | 42.84% | 31.03% | 16.80% | 15.24% |
| Pretax margin | 42.15% | 37.45% | 24.64% | 10.22% | 9.80% |
| Net profit margin | 39.31% | 34.62% | 24.54% | 12.39% | 12.05% |
Broadcom Inc's profitability ratios show a consistent trend of improvement over the past five years, indicating a strong performance in terms of generating profit from its operations.
The gross profit margin, which reflects the company's ability to generate profit from its revenue after accounting for the cost of goods sold, has steadily increased from 70.25% in 2019 to 74.11% in 2023. This trend indicates that Broadcom has been effectively managing its production and supply chain costs, resulting in higher gross profit margins.
The operating profit margin, which measures the company's ability to generate profit from its core business activities, has also shown a notable improvement, increasing from 18.84% in 2019 to 45.94% in 2023. This indicates that Broadcom has been successful in controlling its operating expenses and increasing operational efficiency, leading to a higher percentage of operating profit.
Furthermore, the pretax margin, which measures the company's ability to generate profit before taxes, has seen a significant improvement from 9.85% in 2019 to 42.15% in 2023. This reflects Broadcom's ability to effectively manage its non-operating expenses and generate higher profits at the pre-tax level.
Lastly, Broadcom's net profit margin, which shows the percentage of revenue that translates into net income, has consistently increased from 11.93% in 2019 to 39.31% in 2023. This indicates that the company has been successful in managing its taxes and other non-operating expenses, resulting in higher profitability for its shareholders.
In summary, Broadcom Inc's profitability ratios demonstrate a strong and improving performance over the past five years, reflecting efficient cost management, operational excellence, and overall profitability in its business operations.
Return on investment
| Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | Nov 3, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 22.24% | 19.42% | 11.27% | 5.29% | 5.10% |
| Return on assets (ROA) | 19.33% | 15.69% | 8.91% | 3.90% | 4.04% |
| Return on total capital | 28.35% | 25.53% | 12.86% | 6.26% | 6.27% |
| Return on equity (ROE) | 58.70% | 50.62% | 26.96% | 12.38% | 10.92% |
Based on the profitability ratios of Broadcom Inc from 2019 to 2023, several key trends and insights can be identified.
1. Operating Return on Assets (Operating ROA):
- There has been a consistent improvement in the operating ROA from 2019 to 2023, indicating that the company has efficiently utilized its assets to generate operating income.
- This trend suggests that Broadcom has been successful in managing its operations to generate higher returns relative to its total asset base.
2. Return on Assets (ROA):
- The ROA has shown a steady increase over the years, reflecting Broadcom's ability to generate profits from its assets.
- This improvement implies that the company has become more efficient in utilizing its assets to generate earnings for its shareholders.
3. Return on Total Capital:
- Similar to the ROA, the return on total capital has exhibited a consistent upward trend, indicating that the company has been successful in generating higher returns relative to its overall capital base.
- This implies that Broadcom has effectively utilized its total capital to create value for its shareholders.
4. Return on Equity (ROE):
- The ROE has experienced significant growth over the years, reflecting a substantial increase in profitability attributable to shareholders' equity.
- This trend suggests that Broadcom has been increasingly successful in leveraging shareholder equity to generate higher returns for its investors.
Overall, the profitability ratios of Broadcom Inc demonstrate a positive and improving trend, indicating the company's enhanced efficiency in generating profits from its assets and capital. These trends reflect positively on Broadcom's operational and financial management, as well as its ability to create value for its shareholders.