Garmin Ltd (GRMN)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 58.85% | 57.19% | 57.86% | 58.54% | 59.20% |
| Operating profit margin | 25.38% | 20.79% | 21.19% | 24.68% | 25.15% |
| Pretax margin | 26.99% | 22.84% | 21.95% | 24.44% | 26.33% |
| Net profit margin | 22.47% | 24.54% | 20.07% | 21.92% | 23.68% |
Garmin Ltd's profitability ratios show fluctuations over the past five years. The gross profit margin decreased from 59.20% in 2020 to 57.19% in 2023 but then rebounded to 58.85% in 2024. This indicates a slight decline in the company's ability to generate profit from sales after deducting the cost of goods sold, with some recent improvement.
The operating profit margin also saw a downward trend, dropping from 25.15% in 2020 to 20.79% in 2023, before increasing to 25.38% in 2024. This suggests that the company's efficiency in managing operating expenses and generating operating profit was initially challenged but has shown a positive recovery.
The pretax margin experienced a decline from 26.33% in 2020 to 21.95% in 2022 before rebounding to 26.99% in 2024. This indicates fluctuations in the company's ability to generate profit before accounting for taxes, with a notable improvement in the most recent year.
The net profit margin also varied, decreasing from 23.68% in 2020 to 20.07% in 2022 before increasing to 22.47% in 2024. This suggests fluctuations in the company's ability to convert revenue into net income, with some recovery in profitability in the most recent year.
Overall, Garmin Ltd's profitability ratios show some instability but also highlight the company's ability to adapt and improve its profitability performance over time. It is important for investors and stakeholders to monitor these ratios continuously to assess the company's financial health and performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 16.55% | 12.69% | 13.29% | 15.52% | 14.99% |
| Return on assets (ROA) | 14.66% | 14.99% | 12.59% | 13.78% | 14.11% |
| Return on total capital | 20.31% | 15.58% | 16.57% | 19.93% | 19.11% |
| Return on equity (ROE) | 17.98% | 18.39% | 15.69% | 17.70% | 17.99% |
Based on the provided data, we can see that Garmin Ltd has maintained a stable and relatively strong level of profitability over the years, as indicated by its profitability ratios.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA measures the company's ability to generate profits from its operational assets. Garmin's Operating ROA has shown a slight increase from 14.99% in 2020 to 16.55% in 2024, indicating efficient utilization of its operational assets to generate income.
2. Return on Assets (ROA):
- The ROA reflects the company's overall efficiency in generating profits from its total assets. Garmin's ROA has fluctuated between 12.59% and 14.99% during the period, with a peak of 14.99% in 2023. This ratio indicates the company's ability to generate a favorable return on its assets.
3. Return on Total Capital:
- This ratio evaluates the company's profitability in relation to its total capital, including both debt and equity. Garmin's Return on Total Capital has shown a relatively stable trend, ranging from 15.58% in 2023 to 20.31% in 2024. This suggests that the company efficiently utilizes both debt and equity to generate profits.
4. Return on Equity (ROE):
- The ROE measures the return earned by the company on its shareholders' equity. Garmin's ROE has remained consistent, ranging from 15.69% to 18.39% over the period. This indicates that the company is effectively generating returns for its shareholders.
Overall, Garmin Ltd's profitability ratios demonstrate a solid performance in terms of generating profits relative to its assets, capital, and equity, showcasing operational efficiency and effective utilization of resources to enhance shareholder value.