Danaher Corporation (DHR)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 59.50% | 58.74% | 60.21% | 60.95% | 55.98% |
| Operating profit margin | 20.37% | 21.77% | 27.61% | 25.35% | 18.99% |
| Pretax margin | 19.46% | 21.11% | 26.35% | 25.80% | 20.17% |
| Net profit margin | 16.33% | 19.85% | 22.91% | 21.84% | 16.36% |
Danaher Corporation has shown a consistent improvement in its profitability margins over the past five years. The gross profit margin has increased from 55.98% in 2020 to 59.50% in 2024, indicating the company's ability to effectively control its production costs and generate more revenue from its core operations.
The operating profit margin has also demonstrated a positive trend, rising from 18.99% in 2020 to 20.37% in 2024. This suggests that Danaher Corporation has been able to manage its operating expenses efficiently while increasing its operating income.
The pretax margin peaked at 26.35% in 2022, reflecting the company's strong profitability before taxes. However, there was a slight decline in 2023 and 2024, which may indicate some challenges in managing non-operating expenses or taxes during those periods.
The net profit margin, on the other hand, reached its highest point of 22.91% in 2022 before decreasing to 16.33% in 2024. This decline suggests that Danaher Corporation faced some challenges in maintaining its bottom line profitability, potentially due to factors such as increased taxes, interest expenses, or other non-operating costs.
Overall, Danaher Corporation has shown a strong performance in terms of profitability margins, with consistent improvements in gross profit and operating profit margins. However, the slight decline in pretax and net profit margins in the later years indicates the need for continued strategic management to sustain and enhance the company's profitability levels.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.27% | 6.16% | 10.30% | 8.97% | 5.56% |
| Return on assets (ROA) | 5.03% | 5.61% | 8.55% | 7.73% | 4.79% |
| Return on total capital | 0.00% | 9.73% | 15.14% | 17.36% | 12.11% |
| Return on equity (ROE) | 7.87% | 8.87% | 14.39% | 14.24% | 9.17% |
Danaher Corporation's profitability ratios show a mixed performance over the past five years.
1. Operating return on assets (Operating ROA) has shown an improving trend, increasing from 5.56% in 2020 to 10.30% in 2022 before declining to 6.27% in 2024. This ratio indicates the company's ability to generate operating income from its assets.
2. Return on assets (ROA) has also shown a similar pattern, starting at 4.79% in 2020, peaking at 8.55% in 2022, and then decreasing to 5.03% in 2024. ROA measures the company's overall profitability in relation to its total assets.
3. Return on total capital demonstrates a significant fluctuation, with a notable drop from 2019 to 2020, showing a return of 0.00% in 2024. The return on total capital ratio reflects the company's ability to generate earnings from both debt and equity capital invested in the business.
4. Return on equity (ROE) has displayed a somewhat consistent performance, ranging from 7.87% in 2024 to a peak of 14.39% in 2022. ROE evaluates the company's profitability from the perspective of shareholders' equity.
Overall, while Danaher Corporation's profitability ratios have shown some fluctuations, it is essential to further analyze the underlying factors driving these trends to assess the company's financial performance accurately.