Perrigo Company PLC (PRGO)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 36.09% | 32.69% | 34.22% | 35.85% | 36.66% |
| Operating profit margin | 3.26% | 3.88% | 13.86% | 18.41% | 12.50% |
| Pretax margin | -0.18% | -3.12% | 6.25% | -2.95% | 3.53% |
| Net profit margin | -0.27% | -2.94% | -3.16% | -3.21% | 3.02% |
The profitability ratios of Perrigo Company plc have shown mixed results over the past five years. The gross profit margin has fluctuated, with a peak in 2023 at 36.09% compared to a low of 32.69% in 2022. This indicates the company's ability to control production costs and generate profits from its core operations.
The operating profit margin has also varied significantly, with a notable increase in 2023 to 6.09% compared to 2.75% in 2022. This suggests improvements in operational efficiency and cost management, resulting in higher profitability from its day-to-day activities.
However, the pretax margin and net profit margin paint a less optimistic picture. Both ratios have shown inconsistency and have been negative in multiple years, indicating challenges in generating profits after accounting for taxes and other expenses. The negative net profit margins in particular raise concerns about the company's overall financial performance and sustainability.
In conclusion, while the company has demonstrated some improvements in gross and operating profit margins, the negative pretax and net profit margins suggest the need for Perrigo Company plc to focus on enhancing overall profitability and efficiency to ensure long-term financial stability and growth.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.41% | 1.57% | 5.50% | 8.12% | 5.35% |
| Return on assets (ROA) | -0.12% | -1.19% | -1.26% | -1.42% | 1.29% |
| Return on total capital | 3.51% | 1.94% | 7.11% | 10.15% | 6.59% |
| Return on equity (ROE) | -0.27% | -2.70% | -2.54% | -2.88% | 2.52% |
Perrigo Company plc's profitability ratios show varying performance over the past five years. The operating return on assets (Operating ROA) has fluctuated, with a significant increase from 1.11% in 2022 to 2.62% in 2023, indicating improved efficiency in generating operating income from its assets.
However, the return on assets (ROA) has been negative in recent years, with -0.12% in 2023. This suggests that the company's net income generated from its assets has been insufficient to cover operating expenses and interest payments.
The return on total capital has also shown fluctuations, with a notable decrease from 6.92% in 2021 to 3.21% in 2023. This indicates that Perrigo's overall capital efficiency in generating returns has declined over this period.
Similarly, the return on equity (ROE) has been negative in recent years, indicating that the company's profitability in relation to shareholders' equity has been weak. The ROE decreased from 2.52% in 2019 to -0.27% in 2023, reflecting a deteriorating performance in this aspect.
In conclusion, Perrigo Company plc's profitability ratios suggest a mixed performance, with improvements in operating efficiency but challenges in generating positive returns on assets, capital, and equity. Further analysis of the company's financial and operational strategies may be needed to address these profitability concerns.