Synopsys Inc (SNPS)
Profitability ratios
Return on sales
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 79.68% | 73.38% | 79.07% | 79.50% | 78.44% |
| Operating profit margin | 22.13% | 21.79% | 22.87% | 17.48% | 16.83% |
| Pretax margin | 38.57% | 22.48% | 22.07% | 19.19% | 17.34% |
| Net profit margin | 36.94% | 21.05% | 19.38% | 18.02% | 18.03% |
The profitability ratios of Synopsys Inc have shown a positive trend over the past five years. The gross profit margin has improved steadily from 78.44% in 2020 to 79.68% in 2024, indicating efficient cost management and pricing strategies.
The operating profit margin has also shown a consistent increase from 16.83% in 2020 to 22.13% in 2024, suggesting effective control over operating expenses and improved operational efficiency.
Similarly, the pretax margin has displayed a significant improvement over the years, from 17.34% in 2020 to 38.57% in 2024. This indicates that the company has been successful in generating higher revenues relative to its total operating costs and interest expenses.
Moreover, the net profit margin has shown substantial growth, reaching 36.94% in 2024, compared to 18.03% in 2020. This indicates that Synopsys Inc has been able to effectively manage its bottom line and translate its revenues into higher net profits through improved cost management and operational performance.
Overall, the improving profitability ratios reflect the company's strong financial performance and efficiency in generating profits over the years.
Return on investment
| Oct 31, 2024 | Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.37% | 12.32% | 12.34% | 8.40% | 7.72% |
| Return on assets (ROA) | 17.31% | 11.90% | 10.45% | 8.66% | 8.27% |
| Return on total capital | 15.05% | 21.32% | 20.29% | 15.23% | 12.86% |
| Return on equity (ROE) | 25.17% | 20.01% | 17.85% | 14.31% | 13.54% |
Analyzing Synopsys Inc's profitability ratios over the past five years reveals a mixed performance.
The Operating Return on Assets (Operating ROA) has shown fluctuations, with a peak in 2023 at 12.32% and a decrease in the following years. Despite the variability, the company has consistently generated positive returns on its assets, indicating effective asset utilization to generate operating profits.
The Return on Assets (ROA) exhibited a notable increase in 2024 to 17.31%, showing a strong ability to generate profit relative to its total assets. This improvement may suggest enhanced efficiency in asset management and operations, contributing to higher profitability.
The Return on Total Capital has shown an overall upward trend, reaching 15.05% in 2024 from 12.86% in 2020. This indicates that the company has been able to generate higher returns on the total capital employed, potentially reflecting effective capital allocation and investment decisions.
The Return on Equity (ROE) has also demonstrated a positive trajectory, with a significant increase to 25.17% in 2024 from 13.54% in 2020, indicating that shareholders' equity is generating higher returns over time. This improvement could signify enhanced profitability and shareholder value creation.
In conclusion, Synopsys Inc has generally exhibited satisfactory profitability levels, with improvements in key ratios such as ROA, ROE, and Return on Total Capital. However, monitoring the Operating ROA for potential volatility and identifying strategies to maintain or enhance profitability will be crucial for sustained financial performance.