Broadcom Inc (AVGO)
Profitability ratios
Return on sales
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 63.03% | 68.93% | 66.55% | 61.36% | 56.58% |
| Operating profit margin | 26.10% | 45.25% | 42.84% | 31.03% | 16.80% |
| Pretax margin | 18.70% | 42.15% | 37.45% | 24.64% | 10.22% |
| Net profit margin | 11.43% | 39.31% | 34.62% | 24.54% | 12.39% |
Broadcom Inc's profitability ratios have shown fluctuations over the past five years. The gross profit margin, which indicates the percentage of revenue that exceeds the cost of goods sold, has ranged from 56.58% to 68.93%, with a recent decrease to 63.03% as of November 3, 2024.
The operating profit margin, a measure of efficiency in managing operating expenses, has also varied significantly, with a high of 45.25% in October 29, 2023, dropping to 26.10% on November 3, 2024. This suggests potential challenges in controlling operating costs.
Similarly, the pretax margin, reflecting the company's ability to generate profit before accounting for taxes, shows fluctuations from 10.22% to 42.15%. As of November 3, 2024, the pretax margin stands at 18.70%, implying some improvements over the previous year.
The net profit margin, which is the bottom line profitability ratio, has ranged from 12.39% to 39.31%. As of November 3, 2024, the net profit margin is 11.43%, indicating a decrease in profitability compared to previous years.
Overall, Broadcom's profitability ratios demonstrate variability, suggesting the need for the company to focus on improving operational efficiency and cost management to enhance profitability in the future.
Return on investment
| Nov 3, 2024 | Oct 29, 2023 | Oct 30, 2022 | Oct 31, 2021 | Nov 1, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.13% | 22.24% | 19.42% | 11.27% | 5.29% |
| Return on assets (ROA) | 3.56% | 19.33% | 15.69% | 8.91% | 3.90% |
| Return on total capital | 10.25% | 28.35% | 25.53% | 12.86% | 6.26% |
| Return on equity (ROE) | 8.71% | 58.70% | 50.62% | 26.96% | 12.38% |
Broadcom Inc's profitability ratios have shown fluctuations over the past five years.
1. Operating return on assets (Operating ROA) has decreased from 8.13% in 2024 to 5.29% in 2020. This ratio indicates that the company is generating operating profits from its assets but has experienced a decline in recent years.
2. Return on assets (ROA) has also shown a downward trend, falling from 3.56% in 2024 to 3.90% in 2020. ROA measures the overall efficiency of asset utilization in generating profits, and the decreasing trend suggests a potential inefficiency in asset management.
3. Return on total capital has fluctuated over the years, with a significant drop from 28.35% in 2023 to 6.26% in 2020. This ratio highlights the company's ability to generate profits from both debt and equity financing, and the decrease indicates a potential decrease in overall profitability.
4. Return on equity (ROE) has also experienced fluctuations, with a decrease from 58.70% in 2023 to 12.38% in 2020. ROE represents the return generated on shareholders' equity, and the declining trend suggests a decrease in profitability attributable to equity shareholders.
Overall, the profitability ratios for Broadcom Inc indicate a mixed performance, with some ratios showing a decline over the years. It is essential for the company to carefully evaluate its asset management, capital structure, and equity utilization to improve profitability in the future.