Synopsys Inc (SNPS)
Profitability ratios
Return on sales
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 79.08% | 79.07% | 79.50% | 78.44% | 77.60% |
| Operating profit margin | 21.72% | 22.87% | 17.48% | 16.83% | 15.48% |
| Pretax margin | 22.48% | 22.07% | 19.19% | 17.34% | 16.23% |
| Net profit margin | 21.05% | 19.38% | 18.02% | 18.03% | 15.84% |
Based on the profitability ratios of Synopsys, Inc. over the past five years, several observations can be made. The gross profit margin has consistently remained high, indicating the company's ability to efficiently manage its production costs and pricing strategies. The operating profit margin has also shown a positive trend, reflecting the effectiveness of the company in controlling its operating expenses and generating profits from its core business activities.
The pretax margin and net profit margin have both demonstrated an upward trajectory, suggesting an improvement in the company's overall profitability and operational efficiency. The pretax margin, which measures the company's earnings before taxes, has experienced steady growth, indicating effective tax management and efficient use of income. Likewise, the net profit margin, which represents the company's profit after all expenses, has shown consistent improvement, demonstrating Synopsys' ability to generate greater earnings from its revenue over the years.
Overall, Synopsys, Inc.'s profitability ratios indicate strong performance and sustained profitability, reflecting the company's sound financial management and successful execution of its business strategies.
Return on investment
| Oct 31, 2023 | Oct 31, 2022 | Oct 31, 2021 | Oct 31, 2020 | Oct 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 12.28% | 12.34% | 8.40% | 7.72% | 8.12% |
| Return on assets (ROA) | 11.90% | 10.45% | 8.66% | 8.27% | 8.31% |
| Return on total capital | 21.32% | 20.29% | 15.23% | 12.86% | 13.26% |
| Return on equity (ROE) | 20.01% | 17.85% | 14.31% | 13.54% | 13.04% |
Synopsys, Inc.'s profitability ratios show a positive trend over the past five years. The Operating return on assets (Operating ROA) has increased from 8.86% in 2019 to 13.03% in 2023, indicating that the company has effectively improved its operating income generation relative to its asset base. Similarly, the Return on assets (ROA) has also trended upwards, reaching 11.90% in 2023 from 8.31% in 2019, demonstrating an improved ability to generate profits from its total assets.
The Return on total capital has exhibited a consistent upward trajectory, reaching 21.84% in 2023 from 13.44% in 2019, reflecting the company's efficient use of its capital to generate returns. Furthermore, the Return on equity (ROE) has shown an increasing trend, climbing from 13.04% in 2019 to 20.01% in 2023, indicating enhanced profitability for shareholders' investments.
Overall, the increasing trend in these profitability ratios suggests that Synopsys, Inc. has been successful in boosting its operational efficiency and generating higher returns for both its assets and capital, as well as delivering improved returns to its equity holders.