Danaher Corporation (DHR)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 59.23% | 51.58% | 61.40% | 56.75% | 56.10% |
| Operating profit margin | 21.96% | 24.01% | 25.53% | 19.25% | 18.37% |
| Pretax margin | 23.58% | 26.42% | 26.28% | 20.45% | 21.81% |
| Net profit margin | 20.11% | 22.97% | 22.00% | 16.59% | 16.90% |
Danaher Corp.'s profitability ratios over the past five years reflect a consistent trend of strong performance. The gross profit margin has shown a slight decline from 60.95% in 2021 to 58.74% in 2023, which could be attributed to changes in the cost structure or pricing strategies. However, the gross profit margin remains relatively healthy, indicating the company's ability to generate profits after accounting for the cost of goods sold.
The operating profit margin has exhibited fluctuations over the years but generally shows an increasing trend, reaching 21.77% in 2023. This suggests that Danaher has been effectively managing its operating expenses and improving operational efficiency to enhance profitability.
The pretax margin, representing the profitability before accounting for taxes, also demonstrates a positive trajectory, with a slight decrease in 2023 compared to the previous years. The pretax margin stood at 21.11% in 2023, indicating that Danaher is efficiently generating profits at the pre-tax level.
The net profit margin, which reflects the company's profitability after all expenses, including taxes, has shown a consistent improvement over the years, reaching 19.85% in 2023. This suggests that Danaher has been successful in optimizing its cost structure and operating efficiently to maximize profitability for its shareholders.
Overall, Danaher Corp.'s profitability ratios indicate sound financial health and effective management of its operations to drive profitability growth over the years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.16% | 8.93% | 8.97% | 5.56% | 5.27% |
| Return on assets (ROA) | 5.64% | 8.55% | 7.73% | 4.79% | 4.85% |
| Return on total capital | 8.37% | 12.29% | 11.77% | 7.82% | 7.70% |
| Return on equity (ROE) | 8.91% | 14.39% | 14.24% | 9.17% | 9.94% |
Danaher Corp.'s profitability ratios show a generally positive trend over the five-year period from 2019 to 2023.
1. Operating return on assets (Operating ROA) reflects the company's ability to generate operating income from its assets. While there was a slight decline from 10.30% in 2022 to 6.16% in 2023, Danaher Corp. maintained a relatively stable performance, indicating efficient asset utilization.
2. Return on assets (ROA) measures the overall profitability of the company in relation to its total assets. The consistent increase in ROA from 4.74% in 2019 to 5.61% in 2023 suggests improved efficiency in generating profits from its assets.
3. Return on total capital indicates the return generated from all sources of capital, including debt and equity. The ratio shows a positive upward trend, increasing from 6.29% in 2019 to 7.24% in 2023, reflecting the company's ability to generate higher returns relative to its total invested capital.
4. Return on equity (ROE) measures the returns earned by the company on shareholders' equity. Despite some fluctuations, ROE remained relatively stable and showed an upward trend from 9.71% in 2019 to 8.87% in 2023, signaling the company's effective utilization of shareholder funds to generate profits.
Overall, the profitability ratios of Danaher Corp. demonstrate a consistent improvement in operational efficiency and effectiveness in utilizing both operating and total capital to generate returns for its shareholders over the five-year period.