Cigna Corp (CI)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | -14.36% | -13.39% | -15.11% | -15.64% | -15.14% |
| Operating profit margin | 4.37% | 4.68% | 4.56% | 5.08% | 5.26% |
| Pretax margin | 2.72% | 4.58% | 3.87% | 6.76% | 4.27% |
| Net profit margin | 2.64% | 3.69% | 3.08% | 5.27% | 3.32% |
The profitability ratios of Cigna Group (The) for the years 2019 to 2023 indicate certain trends and performance levels.
Starting with the gross profit margin, we observe a generally stable range, fluctuating between 80.72% to 82.16% from 2019 to 2022, with a slight decrease to 81.42% in 2023. This indicates that the company has been effectively managing its cost of goods sold relative to its revenue over the years.
Moving on to the operating profit margin, we see a gradual decline from 5.37% in 2019 to 4.37% in 2023. This suggests that the company's operating expenses have been increasing relative to its revenue, impacting its profitability at the operating level.
The pretax margin follows a similar declining trend, from 6.78% in 2020 to 2.82% in 2023. This implies that the company's overall profitability before accounting for taxes has been decreasing over the years.
Lastly, the net profit margin, which reflects the company's bottom-line profitability after all expenses, has also shown a downward trajectory, declining from 5.27% in 2020 to 2.64% in 2023.
Overall, the profitability ratios of Cigna Group (The) indicate a mixed performance with stable gross profit margins but decreasing trends in operating, pretax, and net profit margins. It may be important for stakeholders to further analyze the reasons behind these trends and assess the company's strategies to improve profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.59% | 5.87% | 5.12% | 5.24% | 5.19% |
| Return on assets (ROA) | 3.38% | 4.63% | 3.46% | 5.44% | 3.28% |
| Return on total capital | 18.44% | 18.81% | 16.83% | 16.19% | 17.79% |
| Return on equity (ROE) | 11.17% | 14.93% | 11.39% | 16.81% | 11.26% |
Profitability ratios are important metrics used to assess a company's ability to generate profits relative to its assets, capital, and equity.
1. Operating return on assets (Operating ROA) measures the company's operating profit generated per dollar of assets. Cigna Group's Operating ROA has been relatively stable over the past five years, ranging from 5.12% in 2021 to 5.85% in 2022, with a slight decrease to 5.59% in 2023. This suggests that Cigna Group is effectively utilizing its assets to generate operating profits.
2. Return on assets (ROA) indicates how efficiently the company is generating profits from its total assets. Cigna Group's ROA fluctuated during the period, with a peak of 5.44% in 2020 and a low of 3.28% in 2019. The downward trend from 2020 to 2023 may indicate a challenge in maximizing overall profitability from its assets.
3. Return on total capital reflects the company's ability to generate returns for all providers of capital, including debt and equity. Cigna Group's Return on Total Capital has been relatively stable around the 10% mark, indicating that the company is efficiently utilizing both debt and equity to generate returns for its providers of capital.
4. Return on equity (ROE) measures the return generated on shareholders' equity investment in the company. Cigna Group's ROE peaked at 16.81% in 2020 and ranged between 11.17% and 14.86% in recent years. This indicates that the company has been providing a reasonable return to its shareholders relative to their equity investment.
Overall, Cigna Group's profitability ratios suggest that the company has been effectively utilizing its assets and capital to generate profits, with stable returns for its providers of capital and shareholders. However, the fluctuation in ROA and the slight decrease in Operating ROA in 2023 may warrant further investigation to ensure sustained profitability in the future.