eBay Inc (EBAY)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 71.99% | 71.98% | 72.64% | 74.57% | 79.80% |
| Operating profit margin | 22.54% | 19.20% | 23.99% | 28.05% | 29.64% |
| Pretax margin | 22.15% | 36.66% | -16.35% | 3.82% | 37.61% |
| Net profit margin | 19.21% | 27.36% | -12.96% | 130.60% | 63.72% |
Based on the provided data, we can analyze eBay Inc's profitability ratios as follows:
1. Gross Profit Margin:
- The gross profit margin shows the percentage of revenue that exceeds the cost of goods sold. eBay's gross profit margin has decreased from 79.80% in 2020 to 71.99% in 2024. This downward trend indicates a reduction in the efficiency of eBay's cost management in generating profits.
2. Operating Profit Margin:
- The operating profit margin indicates the company's ability to generate profit from its core business operations. eBay's operating profit margin has fluctuated, declining from 29.64% in 2020 to 19.20% in 2023, and then slightly increasing to 22.54% in 2024. The decrease in 2023 reflects challenges in controlling operating expenses, while the subsequent increase may suggest improved operational efficiency.
3. Pretax Margin:
- The pretax margin represents the percentage of profit a company earns before paying taxes. eBay's pretax margin experienced significant fluctuations, from 37.61% in 2020 to -16.35% in 2022, before recovering to 22.15% in 2024. The negative margin in 2022 signals that eBay incurred losses before tax that year, possibly due to one-time expenses or poor financial performance.
4. Net Profit Margin:
- The net profit margin shows the proportion of revenue that translates into net income after all expenses have been deducted. eBay's net profit margin has been erratic, ranging from 63.72% in 2020 to -12.96% in 2022, before stabilizing at 19.21% in 2024. The negative margin in 2022 indicates that eBay incurred a net loss that year, emphasizing the need for cost management and revenue enhancement strategies.
In summary, eBay Inc's profitability ratios have shown varying trends over the years, with fluctuations in key margins. The company should focus on optimizing cost structures, enhancing operational efficiency, and improving revenue generation to ensure sustainable profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 11.97% | 8.98% | 11.27% | 10.98% | 13.65% |
| Return on assets (ROA) | 10.20% | 12.80% | -6.09% | 51.11% | 29.35% |
| Return on total capital | 49.19% | 62.07% | -26.51% | 6.82% | 102.47% |
| Return on equity (ROE) | 38.29% | 43.26% | -24.63% | 139.17% | 159.14% |
eBay Inc's profitability ratios show fluctuations over the years. The operating return on assets (Operating ROA) decreased from 13.65% in 2020 to 8.98% in 2023, before slightly increasing to 11.97% in 2024. This indicates a decline in the company's ability to generate profits from its operations relative to its total assets during this period.
The Return on assets (ROA) varied significantly, with a notable peak of 51.11% in 2021 and a low of -6.09% in 2022. The ROA recovered to 10.20% by the end of 2024, suggesting a mixed performance in utilizing its assets to generate profits over this period.
Furthermore, the Return on total capital experienced a drastic decline from 102.47% in 2020 to -26.51% in 2022, before rebounding to 49.19% by 2024. This indicates fluctuations in the company's ability to generate returns from its total capital employed, reflecting varying levels of operational efficiency and financial leverage.
Lastly, the Return on equity (ROE) revealed a volatile trend, reaching a peak of 159.14% in 2020, a significant drop to -24.63% in 2022, and a gradual recovery to 38.29% by the end of 2024. The ROE reflects the company's ability to generate profits from shareholders' equity, showcasing a mix of high returns and financial challenges during the analyzed period.
In summary, eBay Inc's profitability ratios demonstrate fluctuations in performance, indicating the company's varying success in generating profits relative to its assets, capital, and shareholders' equity over the years.