Cognizant Technology Solutions Corp Class A (CTSH)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 13.89% | 15.28% | 15.27% | 12.70% | 14.28% |
| Operating profit margin | 13.89% | 15.28% | 15.27% | 12.70% | 14.62% |
| Pretax margin | 14.44% | 15.54% | 15.29% | 12.59% | 14.81% |
| Net profit margin | 10.99% | 11.79% | 11.55% | 8.36% | 10.98% |
Cognizant Technology Solutions Corp. has shown a fluctuating trend in its profitability ratios over the past five years. The gross profit margin, which represents the percentage of revenue retained after the cost of goods sold, has declined from 37.30% in 2021 to 34.56% in 2023. This suggests a potential decrease in efficiency in managing production costs.
The operating profit margin, reflecting the company's ability to control operating expenses, has also displayed variability, ranging from 13.99% in 2020 to 15.28% in 2022. This indicates some inconsistency in managing day-to-day operations and expenses.
The pretax margin, indicating the company's earnings before taxes relative to revenue, has experienced fluctuations, with a notable peak in 2023 at 15.54%. This suggests improved profitability before tax expenses in recent years.
The net profit margin, which measures the company's net income as a percentage of revenue, portrays a similar trend to the pretax margin, with an increase from 8.36% in 2020 to 11.79% in 2022 before slightly declining to 10.99% in 2023. This indicates that the company effectively managed its tax burden and other expenses to improve net profitability in recent years.
Overall, Cognizant Technology Solutions Corp.'s profitability ratios reflect a mix of challenges and successes in managing costs and generating profits over the analyzed period. The company should continue to focus on optimizing operational efficiency and cost management to maintain and improve its 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) | 14.55% | 16.63% | 15.83% | 12.49% | 15.14% |
| Return on assets (ROA) | 11.50% | 12.83% | 11.97% | 8.23% | 11.37% |
| Return on total capital | 20.49% | 23.47% | 22.50% | 18.44% | 21.42% |
| Return on equity (ROE) | 16.07% | 18.60% | 17.82% | 12.85% | 16.71% |
Cognizant Technology Solutions Corp.'s profitability ratios show a generally positive trend over the past five years. The operating return on assets (Operating ROA) has been relatively stable, ranging from 13.76% in 2020 to 16.63% in 2022, with a slight dip to 15.79% in 2023. This indicates the company's ability to generate operating income from its assets.
The return on assets (ROA) has also shown improvement over the years, increasing from 8.23% in 2020 to 12.83% in 2022 before decreasing slightly to 11.50% in 2023. This ratio highlights the company's efficiency in generating profit from its total assets.
Return on total capital, which takes into account both equity and debt financing, has demonstrated a consistent uptrend, starting at 20.19% in 2020 and peaking at 22.94% in 2022, before settling at 21.09% in 2023. This suggests that the company is effectively utilizing its capital to generate returns for its stakeholders.
Lastly, return on equity (ROE) has also seen growth over the years, with a notable increase from 12.85% in 2020 to 18.60% in 2022, and then moderating to 16.07% in 2023. This indicates the company's ability to generate returns for its shareholders based on the equity invested in the business.
Overall, Cognizant Technology Solutions Corp.'s profitability ratios reflect a positive trend, demonstrating its efficient utilization of assets, capital, and equity to generate income and returns for its stakeholders.