Medtronic PLC (MDT)
Profitability ratios
Return on sales
| Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | Apr 30, 2022 | |
|---|---|---|---|---|---|
| Gross profit margin | 65.34% | 25.96% | 65.67% | 25.79% | 67.98% |
| Operating profit margin | 15.89% | 15.61% | 17.56% | 17.40% | 18.15% |
| Pretax margin | 14.95% | 14.59% | 17.18% | 16.93% | 17.41% |
| Net profit margin | 11.36% | 11.15% | 12.03% | 11.92% | 15.90% |
Medtronic PLC's profitability ratios have shown varying trends over the past few years. The gross profit margin, which indicates the percentage of revenue retained after accounting for the cost of goods sold, fluctuated significantly from April 2022 to April 2024, ranging from a high of 67.98% to a low of 25.79%, before rebounding to 65.34%. This suggests potential volatility in the company's pricing strategies or cost management.
Similarly, the operating profit margin, which represents the proportion of revenue remaining after deducting operating expenses, decreased from 18.15% in April 2022 to 15.89% in April 2024, with slight fluctuations in between. This indicates potential challenges in controlling operating expenses or optimizing operational efficiency over the period.
The pretax margin, reflecting the percentage of revenue remaining after accounting for all expenses except taxes, followed a downward trend, declining from 17.41% in April 2022 to 14.95% in April 2024. This suggests that Medtronic PLC may be facing increased non-operating expenses or lower profitability from core business activities.
Similarly, the net profit margin, which signifies the percentage of revenue that translates into net income after all expenses have been deducted, also declined over the period, from 15.90% in April 2022 to 11.36% in April 2024. This indicates that the company's bottom line profitability has been under pressure, potentially due to factors such as rising costs or lower revenue growth.
Overall, the declining trend in profitability margins for Medtronic PLC raises concerns about its ability to maintain or improve profitability levels in the future. The company may need to focus on cost control measures, operational efficiency enhancements, and strategic pricing initiatives to enhance its overall profitability in the coming years.
Return on investment
| Apr 30, 2024 | Apr 26, 2024 | Apr 30, 2023 | Apr 28, 2023 | Apr 30, 2022 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 5.72% | 5.72% | 6.03% | 6.03% | 6.32% |
| Return on assets (ROA) | 4.09% | 4.09% | 4.13% | 4.13% | 5.54% |
| Return on total capital | 11.06% | 11.01% | 11.22% | 8.16% | 13.03% |
| Return on equity (ROE) | 7.32% | 7.32% | 7.30% | 7.30% | 9.59% |
Based on the provided data for Medtronic PLC, the profitability ratios show a trend in performance over the years:
1. Operating Return on Assets (Operating ROA): This ratio measures the company's operating income generated for each dollar of asset employed. The Operating ROA has decreased slightly from 6.32% in April 2022 to 5.72% in April 2024, indicating a slight dip in operational efficiency in utilizing its assets.
2. Return on Assets (ROA): ROA gauges the company's overall profitability in relation to its total assets. The ROA decreased from 5.54% in April 2022 to 4.09% in April 2024, reflecting a decline in the company's ability to generate profit from its assets.
3. Return on Total Capital: This ratio evaluates the company's ability to generate returns from both equity and debt capital. The Return on Total Capital decreased from 13.03% in April 2022 to 11.06% in April 2024, indicating a decline in the company's efficiency in generating returns on its total capital.
4. Return on Equity (ROE): ROE measures the return generated on shareholder equity. The ROE declined from 9.59% in April 2022 to 7.32% in April 2024, indicating a decrease in the company's ability to generate profits relative to shareholders' equity.
Overall, the profitability ratios of Medtronic PLC show a downward trend over the years, indicating a decline in the company's overall profitability and efficiency in generating returns for both shareholders and capital providers.