Alphabet Inc Class C (GOOG)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 56.36% | 55.13% | 56.94% | 53.58% | 55.58% |
| Operating profit margin | 27.59% | 26.61% | 30.55% | 22.59% | 21.15% |
| Pretax margin | 28.05% | 25.36% | 35.22% | 26.34% | 24.48% |
| Net profit margin | 24.15% | 21.32% | 29.51% | 22.06% | 21.22% |
Alphabet Inc's profitability ratios exhibit a consistently strong performance over the past five years. The gross profit margin has remained high, ranging from 53.58% to 56.94%, indicating efficient cost management and pricing strategies. The operating profit margin has also shown an upward trend, reaching 30.55% in 2021, reflecting effective operational management and cost control. Furthermore, the pretax margin has demonstrated significant improvement, climbing to 35.22% in 2021 from 24.48% in 2019, indicating enhanced profitability before tax expenses.
Notably, the net profit margin has exhibited a similar positive trend, with a notable increase to 29.51% in 2021 from 21.22% in 2019. This indicates that after accounting for all expenses, including taxes, Alphabet Inc has consistently generated impressive net income in relation to its revenue. Overall, these profitability ratios portray a robust financial performance, signaling effective cost management, operational efficiency, and sustained profitability for the company.
It is important to note that while these ratios demonstrate strong performance, additional analysis of the company's financial statements and industry benchmarks would provide a more comprehensive understanding of Alphabet Inc's profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 20.95% | 20.49% | 21.91% | 12.90% | 12.41% |
| Return on assets (ROA) | 18.34% | 16.42% | 21.16% | 12.60% | 12.45% |
| Return on total capital | 29.29% | 26.94% | 34.50% | 20.38% | 19.34% |
| Return on equity (ROE) | 26.04% | 23.41% | 30.22% | 18.09% | 17.05% |
Alphabet Inc's profitability ratios indicate strong performance over the past five years. The operating return on assets (Operating ROA) has consistently ranged between 12.90% and 21.91%, with a notable increase in 2021. Return on assets (ROA) has also shown a positive trend, hovering between 12.45% and 21.16%. Both metrics demonstrate the company's ability to generate profits from its assets and operations.
Furthermore, the return on total capital has exhibited steady growth, reaching 28.22% in 2023 from 17.60% in 2020. This suggests that Alphabet Inc efficiently utilizes its total capital to generate returns.
The return on equity (ROE) has also shown a similar trend, increasing from 17.05% in 2019 to 30.22% in 2021 before slightly decreasing to 26.04% in 2023. This indicates that the company has been able to deliver strong returns to its shareholders relative to their equity investments.
Overall, the profitability ratios reflect Alphabet Inc's consistent ability to generate profits and returns for both its assets and equity holders over the last five years.