Organon & Co (OGN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Gross profit margin | 26.78% | 32.77% | 33.96% |
| Operating profit margin | -14.72% | -6.67% | -1.32% |
| Pretax margin | 10.75% | 18.17% | 24.25% |
| Net profit margin | 16.33% | 14.85% | 21.43% |
Organon & Co.'s profitability ratios have shown a declining trend over the past five years. The gross profit margin decreased from 70.76% in 2019 to 59.84% in 2023, indicating a decrease in the percentage of revenue retained after accounting for the cost of goods sold.
Similarly, the operating profit margin decreased from 49.38% in 2019 to 21.19% in 2023, reflecting a decline in the company's ability to generate profits from its core operations. This trend suggests that Organon & Co. may be facing challenges in controlling operating expenses or optimizing its revenue streams.
The pretax margin also declined over the five-year period, from 47.52% in 2019 to 10.75% in 2023. This indicates a decrease in the company's profitability before accounting for taxes, further highlighting potential inefficiencies in cost management or revenue generation.
Finally, the net profit margin decreased from 42.51% in 2019 to 16.33% in 2023, indicating a reduced percentage of each dollar of revenue retained as net income. This declining trend in profitability ratios suggests that Organon & Co. may be experiencing challenges in maintaining and growing its bottom line amidst changing market conditions or internal factors impacting its financial performance. Additional analysis of cost structures, revenue drivers, and strategic initiatives may be necessary to identify and address the underlying factors contributing to this downward trend in profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | |
|---|---|---|---|
| Operating return on assets (Operating ROA) | -7.65% | -3.76% | -0.78% |
| Return on assets (ROA) | 8.48% | 8.37% | 12.65% |
| Return on total capital | 13.82% | 19.27% | 23.46% |
| Return on equity (ROE) | — | — | — |
Organon & Co.'s profitability ratios have shown a mixed trend over the past five years.
1. Operating return on assets (Operating ROA) has been gradually declining from 36.41% in 2019 to 11.01% in 2023. This indicates that the company's operating income generated from its assets has been decreasing.
2. Return on assets (ROA) has varied over the years, with a peak of 31.34% in 2019, followed by fluctuations and a slight increase to 8.48% in 2023. This metric shows the overall profitability of the company's assets in generating net income.
3. Return on total capital has also exhibited fluctuations, with a significant drop from 54.05% in 2019 to 15.27% in 2023. This ratio assesses the efficiency of both debt and equity capital investments in generating profits.
4. Return on equity (ROE) data is unavailable for the years provided, making it difficult to evaluate the company's profitability specifically in relation to shareholder equity.
In summary, Organon & Co.'s profitability has shown some instability in recent years, with varying trends in different profitability ratios. It would be essential for the company to closely monitor and address the factors impacting its profitability to ensure sustainable financial performance.