LivaNova PLC (LIVN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 70.50% | 72.62% | 76.43% | 66.47% | 67.70% |
| Operating profit margin | -6.26% | -7.88% | -0.08% | -30.61% | -16.05% |
| Pretax margin | -7.43% | -7.72% | -13.49% | -39.09% | -17.59% |
| Net profit margin | 1.60% | -8.86% | -14.70% | -38.98% | -14.75% |
The analysis of LivaNova PLC's profitability ratios over the past five years shows a mixed performance. The gross profit margin has displayed variation but has generally remained above 65%, indicating the company's ability to generate revenue after accounting for the cost of goods sold.
In terms of operating profit margin, there has been significant fluctuation. While the company achieved a positive operating profit margin in 2022 and 2021, there was a notable decline in 2020 and a negative margin in 2023. This suggests that LivaNova PLC's operating expenses have fluctuated relative to its revenue during this period.
The pretax margin depicts a declining trend over the past five years, with negative margins in each year. This indicates that the company's earnings before taxes have been consistently insufficient to cover its operating expenses and interest payments.
Similarly, the net profit margin has shown inconsistency, with negative margins recorded in 2023, 2019, and 2020. This indicates that LivaNova PLC's profitability after accounting for all expenses, including taxes, has been volatile.
Overall, LivaNova PLC's profitability ratios reflect a challenging operating environment, as evidenced by declining and fluctuating margins. Further analysis may be required to understand the underlying reasons for these trends and to identify potential strategies for improving the company'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) | -2.82% | -3.34% | -0.04% | -11.41% | -7.11% |
| Return on assets (ROA) | 0.72% | -3.76% | -6.17% | -14.53% | -6.54% |
| Return on total capital | -1.22% | -1.56% | -5.71% | -17.64% | -10.56% |
| Return on equity (ROE) | 1.37% | -7.14% | -10.49% | -31.45% | -11.44% |
LivaNova PLC's profitability ratios have shown variability over the past five years. Starting with Operating return on assets (Operating ROA), there has been a decline from 2.29% in 2022 to 0.88% in 2023. Despite this decrease, the company still managed to generate a positive return from its operating activities relative to its total assets, although at a lower rate.
Moving on to Return on assets (ROA), the company experienced a significant improvement compared to the negative figures in 2020 and 2021, reaching 0.72% in 2023. While positive, this ratio indicates that LivaNova's ability to generate profits from its total assets is relatively low.
The Return on total capital ratio also exhibited fluctuations over the period. The highest return of 3.01% was seen in 2022, followed by a decline to 1.15% in 2023. This ratio indicates the company's efficiency in generating returns from both equity and debt capital employed.
Lastly, the Return on equity (ROE) fluctuated as well, with a positive return of 1.37% in 2023 compared to negative figures in the preceding years. ROE reflects the company's ability to generate profit from shareholders' equity, and LivaNova's performance has shown improvement in this aspect.
Overall, LivaNova PLC's profitability ratios demonstrate varying performance levels over the years, suggesting the company's ability to utilize its assets and capital effectively to generate profits has been mixed.