Baxter International Inc (BAX)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 37.69% | 33.59% | 35.71% | 39.93% | 39.30% |
| Operating profit margin | -2.48% | 2.63% | -3.63% | 6.09% | 5.17% |
| Pretax margin | -2.99% | -0.70% | -15.57% | 11.55% | 11.07% |
| Net profit margin | -6.91% | 17.93% | -16.02% | 10.04% | 9.44% |
Based on the provided data, Baxter International Inc's profitability ratios show fluctuations over the period from December 31, 2020, to December 31, 2024.
1. Gross Profit Margin:
- The gross profit margin increased from 39.30% in December 2020 to 39.93% in December 2021, indicating an improvement in the company's ability to generate profit after deducting the cost of goods sold. However, there was a decline to 35.71% in December 2022, before recovering to 37.69% in December 2024.
2. Operating Profit Margin:
- The operating profit margin fluctuated over the years. It increased from 5.17% in December 2020 to 6.09% in December 2021, reflecting improved efficiency in managing operating expenses. However, the margin turned negative in 2022 and 2024, indicating that operating expenses exceeded operating income in those years.
3. Pretax Margin:
- The pretax margin also experienced fluctuations, with a positive trend from 11.07% in December 2020 to 11.55% in December 2021. However, it turned negative in the subsequent years, reaching -15.57% in December 2022, -0.70% in December 2023, and -2.99% in December 2024.
4. Net Profit Margin:
- The net profit margin highlights the company's bottom-line profitability. The margin increased significantly from 9.44% in December 2020 to 17.93% in December 2023. However, there was a sharp decline to -16.02% in December 2022 and -6.91% in December 2024, indicating challenges in generating net income relative to revenue.
In conclusion, Baxter International Inc's profitability ratios show mixed performance, with improvements in certain years but challenges in others. It is essential for the company to focus on cost management, operational efficiency, and revenue generation to sustain and enhance its overall profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -0.43% | 1.38% | -1.94% | 2.32% | 3.01% |
| Return on assets (ROA) | -1.21% | 9.39% | -8.56% | 3.83% | 5.50% |
| Return on total capital | -1.75% | 4.94% | -38.21% | 17.95% | 19.71% |
| Return on equity (ROE) | -4.48% | 31.61% | -41.51% | 14.15% | 12.68% |
Based on the provided data for Baxter International Inc profitability ratios, the company's performance has displayed fluctuating trends over the past five years:
1. Operating Return on Assets (Operating ROA): Baxter International Inc's Operating ROA declined from 3.01% in 2020 to 2.32% in 2021 but then saw a significant decrease to -1.94% in 2022. Subsequently, there was a slight recovery to 1.38% in 2023 and a further decline to -0.43% in 2024. These figures indicate a mix of operational efficiency and asset utilization challenges over the period.
2. Return on Assets (ROA): The Return on Assets ratio followed a similar pattern as the Operating ROA, with a decrease from 5.50% in 2020 to 3.83% in 2021, a significant drop to -8.56% in 2022, a recovery to 9.39% in 2023, and a subsequent decline to -1.21% in 2024. The negative ROA in 2022 and 2024 suggests a period of unprofitability relative to the company's total assets.
3. Return on Total Capital: Baxter International Inc's Return on Total Capital experienced a downward trend, with a decline from 19.71% in 2020 to 17.95% in 2021, a sharp decrease to -38.21% in 2022 (indicating significant losses relative to total capital employed), a modest recovery to 4.94% in 2023, and a further drop to -1.75% in 2024. The negative figures in 2022 and 2024 highlight challenges in generating returns from the total capital invested in the business.
4. Return on Equity (ROE): The Return on Equity ratio for Baxter International Inc also exhibited variability over the five-year period. The ROE declined from 12.68% in 2020 to 14.15% in 2021, but then significantly dropped to -41.51% in 2022 (indicating a substantial decrease in shareholders' equity returns). There was a notable recovery to 31.61% in 2023, followed by a decline to -4.48% in 2024. The negative ROE in 2022 and 2024 portrays challenges in delivering returns to the company's shareholders.
In summary, Baxter International Inc's profitability ratios have shown inconsistency, with periods of decline, recovery, and challenges in generating returns from both operational assets and total capital. These fluctuations reflect the company's varying performance levels and may indicate the need for strategic adjustments to enhance profitability and efficiency in the future.