Quest Diagnostics Incorporated (DGX)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 32.86% | 33.00% | 34.74% | 39.02% | 38.50% |
| Operating profit margin | 13.63% | 13.64% | 14.45% | 22.07% | 20.89% |
| Pretax margin | 11.90% | 12.21% | 12.50% | 24.09% | 19.96% |
| Net profit margin | 8.82% | 9.23% | 9.57% | 18.49% | 15.16% |
Quest Diagnostics Incorporated has shown a steady performance in terms of its profitability ratios over the past five years. The gross profit margin improved from 38.50% in 2020 to 39.02% in 2021 but then experienced a decline to 32.86% in 2024. This indicates a reduction in the percentage of revenue that remains after deducting the cost of goods sold.
The operating profit margin increased from 20.89% in 2020 to 22.07% in 2021 but then decreased consistently to 13.63% in 2024. This suggests a decline in the ability of the company to generate profit from its core operations over the years.
Similarly, the pretax margin followed a pattern of improvement from 19.96% in 2020 to 24.09% in 2021, only to drop to 11.90% in 2024. This indicates a decrease in the percentage of pre-tax income earned for each dollar of revenue over the years.
The net profit margin also displayed a decreasing trend, starting from 15.16% in 2020 and dropping to 8.82% in 2024. This signifies a decline in the percentage of net income obtained for each dollar of revenue, reflecting the overall profitability of the company.
Overall, it is essential for Quest Diagnostics to focus on strategies to improve its profit margins to ensure sustainable profitability and long-term financial health.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.33% | 9.00% | 11.12% | 17.49% | 14.05% |
| Return on assets (ROA) | 5.39% | 6.09% | 7.37% | 14.66% | 10.20% |
| Return on total capital | 20.89% | 20.01% | 23.47% | 42.69% | 30.33% |
| Return on equity (ROE) | 12.85% | 13.54% | 16.05% | 30.96% | 21.17% |
Quest Diagnostics Incorporated has shown a generally positive trend in its profitability ratios over the years, although there has been some fluctuation.
- Operating return on assets (Operating ROA) has increased from 14.05% in 2020 to 17.49% in 2021, reflecting efficient utilization of assets to generate operating income. However, there was a slight decline to 11.12% in 2022, followed by further decreases to 9.00% in 2023 and 8.33% in 2024. This indicates a potential decline in operating efficiency or profitability over the latter years.
- Return on assets (ROA) has also shown a similar pattern, with a notable increase from 10.20% in 2020 to 14.66% in 2021, but then decreased to 7.37% in 2022, 6.09% in 2023, and 5.39% in 2024. This suggests a decline in overall profitability as it pertains to the total assets employed by the company.
- Return on total capital exhibited an upward trend, rising from 30.33% in 2020 to 42.69% in 2021, remaining relatively stable in 2022 at 23.47%, and then hovering around 20% in 2023 and 2024. This indicates a consistent ability to generate returns for both equity and debt holders.
- Return on equity (ROE) has experienced growth from 21.17% in 2020 to 30.96% in 2021, but subsequently, it decreased to 16.05% in 2022, 13.54% in 2023, and 12.85% in 2024. This suggests a declining trend in the ability of the company to generate profits relative to the shareholders' equity.
Overall, while Quest Diagnostics has maintained relatively strong profitability metrics, investors and analysts may monitor the downward trend in some ratios to assess the company's operational and financial performance in the coming years.