Globus Medical (GMED)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 65.05% | 74.22% | 75.03% | 72.44% | 77.08% |
| Operating profit margin | 8.49% | 22.29% | 17.95% | 14.12% | 21.90% |
| Pretax margin | 10.54% | 23.76% | 18.83% | 15.96% | 24.19% |
| Net profit margin | 7.83% | 18.59% | 15.57% | 12.96% | 19.76% |
Globus Medical Inc's profitability ratios have exhibited some fluctuations over the past five years. The gross profit margin has shown a declining trend, moving from 77.08% in 2019 to 65.05% in 2023. This indicates that the cost of goods sold relative to revenue has increased over time.
The operating profit margin has also experienced variations, with a notable decrease from 22.23% in 2019 to 12.87% in 2023. This suggests that the company's operating expenses have risen relative to sales, impacting its profitability at the operating level.
The pretax margin has shown a similar pattern, declining from 24.19% in 2019 to 10.54% in 2023. This indicates that the company's pre-tax earnings as a percentage of total revenue have decreased over this period.
Lastly, the net profit margin, which reflects the company's bottom-line profitability, has also exhibited a downward trajectory, dropping from 19.76% in 2019 to 7.83% in 2023. This suggests that after accounting for taxes and other expenses, Globus Medical Inc's net income as a percentage of revenue has decreased over the years.
Overall, the declining trend in profitability ratios for Globus Medical Inc raises concerns about its ability to maintain and enhance profitability in the long run. Further analysis of cost management, revenue generation strategies, and efficiency improvements may be necessary to address these concerns and improve the company's financial performance.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.62% | 10.98% | 8.79% | 6.63% | 11.23% |
| Return on assets (ROA) | 2.42% | 9.16% | 7.62% | 6.09% | 10.13% |
| Return on total capital | 3.02% | 12.35% | 9.87% | 7.40% | 12.26% |
| Return on equity (ROE) | 3.07% | 10.30% | 8.57% | 6.79% | 11.07% |
Based on the profitability ratios provided for Globus Medical Inc for the years 2019 to 2023, we can observe the following trends:
1. Operating Return on Assets (Operating ROA):
- Globus Medical Inc's Operating ROA has fluctuated over the years, ranging from 3.97% in 2023 to a high of 11.39% in 2019.
- The decreasing trend from 2019 to 2023 may indicate potential operational inefficiencies or decreasing profitability generated from its assets.
2. Return on Assets (ROA):
- The company's ROA has also shown variability, with values ranging from 2.42% in 2023 to 10.13% in 2019.
- A decline in ROA from 2019 to 2023 suggests that Globus Medical Inc may be less effective in generating profits relative to its total assets during the later periods.
3. Return on Total Capital:
- The return on total capital has fluctuated, with values spanning 4.57% in 2023 to 12.80% in 2022.
- The declining trend from 2019 to 2023 may indicate that the company is generating lower returns relative to the total capital employed in its operations.
4. Return on Equity (ROE):
- The ROE has also shown variability, ranging from 3.07% in 2023 to 11.07% in 2019.
- A decrease in ROE from 2019 to 2023 suggests that Globus Medical Inc may be less efficient in generating returns for its equity shareholders.
In summary, the profitability ratios of Globus Medical Inc have displayed fluctuations over the years, with a general downward trend observed from 2019 to 2023. This could indicate potential challenges in effectively utilizing assets, generating profits, and providing returns to both capital providers and equity shareholders. Further analysis of the company's financial performance and operational strategies may be necessary to understand the underlying factors driving these trends in profitability ratios.