Alphabet Inc Class A (GOOGL)
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% |
Based on the provided data, we can observe the trend in Alphabet Inc's profitability ratios over the past five years.
The gross profit margin has been relatively stable, ranging from 53.58% in 2020 to 56.94% in 2021, before settling at 56.64% in 2023. This indicates that the company has been effectively managing its production and distribution costs relative to its revenue.
The operating profit margin has shown consistent improvement, increasing from 22.20% in 2019 to 27.23% in 2023. This suggests that the company has been able to control its operating expenses and generate higher profits from its core business operations.
Similarly, the pretax margin has exhibited a positive trend, rising from 24.48% in 2019 to 27.89% in 2023. This indicates that Alphabet Inc has been able to generate higher profits before accounting for taxes.
The net profit margin, which reflects the company's overall profitability, has also shown improvement over the years, increasing from 21.22% in 2019 to 24.01% in 2023. This implies that the company has been efficiently managing its expenses and generating more profit for its shareholders.
Overall, the trend in Alphabet Inc's profitability ratios demonstrates the company's ability to effectively control costs and increase profitability over the past five years. These positive trends may indicate strong financial management and operational efficiency within the organization.
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% |
Based on the provided data, Alphabet Inc's profitability ratios demonstrate consistent and strong performance over the past five years. The operating return on assets (Operating ROA) has fluctuated slightly, ranging from 20.39% to 21.91% between 2019 and 2023, indicating that the company efficiently generates operating income relative to its total assets.
The return on assets (ROA) has also displayed a positive trend, reaching 18.34% in 2023 from 12.45% in 2019. This suggests that Alphabet Inc has been able to increase its overall net income relative to its total assets over the years.
Furthermore, the return on total capital and return on equity (ROE) have shown significant improvements, with both ratios consistently increasing annually from 2019 to 2023. The return on total capital increased from 17.63% to 28.22%, while the ROE rose from 17.05% to 26.04% during the same period.
Overall, these trends indicate that Alphabet Inc has effectively managed its assets and capital to generate higher profits, resulting in improved returns for its shareholders. This strong profitability performance suggests the company's ability to create value for its investors and underscores its efficient use of resources to drive earnings growth.