Perrigo Company PLC (PRGO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 35.27% | 36.09% | 32.69% | 34.22% | 35.85% |
| Operating profit margin | 2.58% | 3.26% | 3.88% | 13.86% | 18.41% |
| Pretax margin | -1.85% | -0.18% | -3.12% | 6.25% | -2.95% |
| Net profit margin | -3.93% | -0.27% | -2.94% | -3.16% | -3.21% |
Based on the provided data, Perrigo Company PLC's profitability ratios have shown varying trends over the years.
1. Gross Profit Margin: The gross profit margin measures the percentage of revenue that exceeds the cost of goods sold. Perrigo's gross profit margin has fluctuated between 32.69% to 36.09% over the five-year period. While there was a slight dip in 2022, the margin remained relatively stable overall.
2. Operating Profit Margin: The operating profit margin indicates the percentage of revenue that remains after deducting operating expenses. Perrigo's operating profit margin decreased significantly from 18.41% in 2020 to 2.58% in 2024. This decline could be a result of increased operating expenses relative to revenue.
3. Pretax Margin: The pretax margin reflects the percentage of revenue that remains after accounting for all expenses except taxes. Perrigo's pretax margin was negative in 2020 and 2022, indicating that the company's expenses exceeded its revenue during those years. Although the margin improved in 2021 and 2023, it remained negative in 2024.
4. Net Profit Margin: The net profit margin represents the percentage of revenue that translates into net income. Perrigo's net profit margin was negative in most years, with the biggest drop occurring in 2024 at -3.93%. This suggests that Perrigo faced challenges in generating profits after accounting for all expenses, including taxes.
In conclusion, while Perrigo's gross profit margin remained relatively stable, its operating, pretax, and net profit margins experienced significant fluctuations and, in most years, recorded negative values. This indicates potential challenges in controlling expenses and maintaining profitability over the five-year period.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.17% | 1.41% | 1.57% | 5.50% | 8.12% |
| Return on assets (ROA) | -1.78% | -0.12% | -1.19% | -1.26% | -1.42% |
| Return on total capital | 2.48% | 3.47% | 3.48% | 11.71% | 4.90% |
| Return on equity (ROE) | -3.98% | -0.27% | -2.70% | -2.54% | -2.88% |
Based on the provided data, Perrigo Company PLC's profitability ratios exhibit a mixed performance over the five-year period from 2020 to 2024.
1. Operating return on assets (Operating ROA) shows a decreasing trend from 8.12% in 2020 to 1.17% in 2024, indicating a decline in the company's ability to generate operating profit from its assets.
2. Return on assets (ROA) is negative throughout the period, with a minimum of -1.78% in 2024, implying that Perrigo is not effectively utilizing its assets to generate profits.
3. Return on total capital fluctuates over the years, ranging from 2.48% in 2024 to 11.71% in 2021. This ratio suggests the company's ability to generate profits from both equity and debt capital has been inconsistent.
4. Return on equity (ROE) remains negative across the years, reaching a low of -3.98% in 2024. This indicates that shareholders have experienced a negative return on their investments in the company.
In conclusion, Perrigo Company PLC's profitability ratios reflect challenges in generating profits from assets, capital, and equity over the period under review. Further analysis and investigation into the company's operations and financial management may be required to gain a deeper understanding of the factors contributing to these performance metrics.