Cadence Design Systems Inc (CDNS)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 74.86% | 74.07% | 72.43% | 72.04% | 70.31% |
| Operating profit margin | 30.91% | 30.38% | 26.25% | 24.25% | 21.30% |
| Pretax margin | 31.67% | 29.58% | 25.89% | 23.77% | 20.75% |
| Net profit margin | 25.72% | 24.02% | 23.45% | 22.19% | 42.84% |
Cadence Design Systems, Inc.'s profitability ratios show consistent and strong performance over the past five years. The gross profit margin has been relatively stable, ranging from 88.60% to 89.73%, indicating efficient cost management and maintaining a high percentage of revenue after accounting for cost of goods sold.
The operating profit margin has steadily increased from 21.42% in 2019 to 30.86% in 2023, demonstrating effective operational management leading to higher profitability before interest and taxes. This suggests improved control over operating expenses and potentially more efficient business operations.
Likewise, the pretax margin and net profit margin have shown an upward trend, indicating a consistent improvement in profitability at different stages of the income statement. The increase in both margins reflects the company's ability to generate more profit relative to its revenue over the years.
Overall, Cadence Design Systems, Inc.'s profitability ratios reflect a positive financial performance, with an increasing trend across gross profit margin, operating profit margin, pretax margin, and net profit margin over the past five years. This indicates strong cost management, operational efficiency, and profitability growth for the company.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 22.07% | 20.90% | 17.76% | 16.34% | 14.65% |
| Return on assets (ROA) | 18.36% | 16.53% | 15.87% | 14.95% | 29.46% |
| Return on total capital | 35.59% | 31.48% | 25.43% | 23.01% | 20.33% |
| Return on equity (ROE) | 30.58% | 30.93% | 25.39% | 23.69% | 47.03% |
Cadence Design Systems, Inc. has demonstrated a consistent improvement in profitability over the past five years as evidenced by its profitability ratios.
The operating return on assets (Operating ROA) has steadily increased from 14.91% in 2019 to 22.26% in 2023, indicating that the company is generating more operating income per dollar of assets employed. This suggests that Cadence Design Systems, Inc. is efficiently utilizing its assets to generate profits.
The overall return on assets (ROA) has also shown an upward trend, starting at 14.95% in 2021 and reaching 18.36% in 2023. This indicates that the company has been successful in generating profits from its total assets over the years.
The return on total capital has consistently increased from 20.43% in 2019 to 31.14% in 2023, showing that Cadence Design Systems, Inc. is generating higher returns for both equity and debt providers. This signifies the effective management of both equity and debt capital by the company.
Lastly, the return on equity (ROE) has shown a positive trajectory over the years, increasing from 23.69% in 2021 to 30.58% in 2023. This indicates that the company is rewarding its shareholders with a higher return on their investments.
Overall, the profitability ratios of Cadence Design Systems, Inc. demonstrate a consistent and positive trend, indicating strong financial performance and efficient management of resources.