eBay Inc (EBAY)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 71.98% | 72.64% | 74.57% | 79.80% | 78.66% |
| Operating profit margin | 19.20% | 23.99% | 28.05% | 29.64% | 23.83% |
| Pretax margin | 36.58% | -16.29% | 132.00% | 73.36% | 26.99% |
| Net profit margin | 27.36% | -12.96% | 130.60% | 63.72% | 24.04% |
EBay Inc.'s profitability ratios indicate fluctuating performance over the past five years. The gross profit margin has shown a declining trend, dropping from 76.78% in 2019 to 71.98% in 2023. This indicates a decrease in the percentage of revenue retained after accounting for the cost of goods sold.
The operating profit margin has been volatile, with a significant negative margin of -14.66% in 2022 followed by a substantial recovery to 19.20% in 2023. This suggests fluctuations in the company's ability to manage operating expenses efficiently.
The pretax margin has also been inconsistent, with negative ratios in 2022 and positive margins in other years. The highest pretax margin was in 2023 at 36.66%, signaling improvements in pre-tax profitability that year.
The net profit margin, which reflects the company's bottom-line profitability, has seen significant variations over the years. A notable anomaly is the exceptionally high net profit margin of 130.60% in 2021, which could be an accounting anomaly or event-driven gain. The margin then dropped to -12.96% in 2022 before recovering to 27.36% in 2023.
In conclusion, EBay Inc.'s profitability ratios indicate a mixed performance over the past five years, with fluctuations in gross, operating, pretax, and net profit margins. It is essential for stakeholders to further investigate the reasons behind these fluctuations to assess the company's overall financial health and sustainability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.98% | 11.27% | 10.98% | 13.65% | 9.74% |
| Return on assets (ROA) | 12.80% | -6.09% | 51.11% | 29.35% | 9.83% |
| Return on total capital | 29.64% | -10.57% | 80.11% | 60.43% | 24.10% |
| Return on equity (ROE) | 43.26% | -24.63% | 139.17% | 159.14% | 62.23% |
EBay Inc.'s profitability ratios have shown fluctuating trends over the past five years.
1. Operating return on assets (Operating ROA):
- The Operating ROA has varied widely, ranging from a low of -6.89% in 2022 to a high of 14.04% in 2020. Notably, the Operating ROA improved significantly in 2023, reaching 8.98%.
2. Return on assets (ROA):
- The ROA also demonstrated volatility, with a negative ROA in 2022, mainly attributed to a decrease in net income. However, there was a remarkable improvement in 2021, where the ROA surged to 51.11%. In 2023, the ROA remained healthy at 12.80%.
3. Return on total capital:
- The Return on total capital had a negative value in 2022, indicating that the company did not manage to generate a return above its total capital that year. In contrast, 2019 exhibited robust performance with a return of 22.59%. Subsequently, there was an upward trend, and in 2023, the Return on total capital stood at 13.75%.
4. Return on equity (ROE):
- EBay Inc.'s ROE has displayed substantial volatility, with a negative ROE in 2022, which could be attributed to either a decrease in net income or an increase in equity. The highest ROE was recorded in 2021 at 139.17%, which indicates strong profitability relative to shareholders' equity. In 2023, the ROE improved significantly to 43.26%.
In summary, while EBay Inc. has witnessed fluctuations in its profitability ratios over the years, particularly in 2022, the company has shown signs of recovery and improvement in 2023, as seen in the rising ROA, Operating ROA, Return on total capital, and ROE.