Meta Platforms Inc. (META)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 81.59% | 80.64% | 78.30% | 80.77% | 80.55% |
| Operating profit margin | 42.35% | 34.87% | 24.88% | 39.70% | 38.07% |
| Pretax margin | 43.14% | 35.37% | 24.77% | 40.15% | 38.66% |
| Net profit margin | 38.07% | 29.16% | 19.94% | 33.43% | 33.96% |
Based on the provided data for Meta Platforms Inc., we can analyze the profitability ratios as follows:
1. Gross Profit Margin:
- The gross profit margin reflects the percentage of revenue that exceeds the cost of goods sold.
- Meta Platforms Inc. has shown a consistent and high gross profit margin ranging from 78.30% to 81.59% over the years, indicating the company efficiently manages its production and pricing strategies.
2. Operating Profit Margin:
- The operating profit margin signifies the proportion of revenue that remains after deducting operating expenses.
- Meta Platforms Inc. experienced fluctuations in its operating profit margin, with a significant decrease in 2022 but a recovery and improvement in subsequent years, reaching 42.35% in 2024, showcasing operational efficiency.
3. Pretax Margin:
- The pretax margin indicates the percentage of revenue that remains after deducting all expenses except taxes.
- Meta Platforms Inc. demonstrated a notable decrease in 2022 but displayed steady growth in subsequent years, achieving a pretax margin of 43.14% in 2024, reflecting effective cost management and revenue generation.
4. Net Profit Margin:
- The net profit margin represents the percentage of revenue that transforms into net income after deducting all expenses, including taxes.
- Meta Platforms Inc. showcased fluctuations in its net profit margin, with a decline in 2022 but a substantial increase in 2024 to 38.07%, indicating efficient overall performance and profitability enhancement.
In conclusion, Meta Platforms Inc. has generally maintained high levels of profitability across its various margins, with strong gross profit margins and a recovery in operating, pretax, and net profit margins over the years, showcasing effective cost control and revenue generation strategies.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 25.13% | 20.36% | 15.58% | 28.17% | 20.51% |
| Return on assets (ROA) | 22.59% | 17.03% | 12.49% | 23.72% | 18.29% |
| Return on total capital | 32.81% | 27.91% | 21.34% | 37.44% | 25.47% |
| Return on equity (ROE) | 34.14% | 25.53% | 18.45% | 31.53% | 22.72% |
Based on the provided data, Meta Platforms Inc. has shown solid profitability ratios over the past five years. Let's break down each ratio for a detailed analysis:
1. Operating Return on Assets (Operating ROA): The Operating ROA indicates how efficiently the company generates profits from its operating assets. Meta Platforms Inc. has demonstrated a fluctuating trend in its Operating ROA, ranging from a strong 28.17% in 2021 to a low of 15.58% in 2022. However, the company managed to improve this ratio in 2024, reaching 25.13%.
2. Return on Assets (ROA): The ROA measures the profitability of the company relative to its total assets. Meta Platforms Inc. has shown a positive trend in its ROA over the five-year period, with the ratio increasing from 18.29% in 2020 to 22.59% in 2024. The company's ROA peaked in 2021 at 23.72%, reflecting strong operational efficiency.
3. Return on Total Capital: This ratio evaluates how effectively the company generates profits from its total capital employed. Meta Platforms Inc. has exhibited consistent improvement in its Return on Total Capital, with the ratio increasing from 25.47% in 2020 to 32.81% in 2024. The company's highest point in this ratio was in 2021, with a return of 37.44%.
4. Return on Equity (ROE): The ROE indicates how well the company generates profits from shareholders' equity. Meta Platforms Inc. has shown a positive trajectory in its ROE, with the ratio climbing from 22.72% in 2020 to 34.14% in 2024. The company's best performance in ROE was in 2021, recording a return of 31.53%.
Overall, Meta Platforms Inc. has demonstrated strong profitability ratios over the past five years, showcasing efficient utilization of assets, capital, and equity to generate returns for its stakeholders. However, the fluctuating trends in some ratios highlight the importance of continuous monitoring and strategic decision-making to sustain and enhance profitability levels in the future.