Solventum Corp. (SOLV)
Profitability ratios
Return on sales
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |
|---|---|---|---|---|---|
| Gross profit margin | 56.09% | 55.78% | 56.32% | 56.59% | 57.17% |
| Operating profit margin | 18.71% | 18.99% | 19.59% | 20.07% | 20.43% |
| Pretax margin | 14.36% | 15.03% | 17.70% | 19.53% | 20.17% |
| Net profit margin | 10.99% | 11.63% | 14.63% | 15.33% | 15.84% |
Solventum Corp.'s profitability ratios indicate fluctuations over the recent quarters. The gross profit margin, which measures the efficiency of the company's production process, has ranged from 55.78% to 57.17% in the last five quarters, with a slight decrease from 56.09% in March 2024.
The operating profit margin, reflecting the company's ability to control operating expenses, has shown a declining trend from 20.43% in March 2023 to 18.71% in March 2024. This suggests a potential issue with cost management.
The pretax margin, indicating the proportion of earnings before taxes to total revenue, also exhibited variability, with a significant drop from 20.17% in March 2023 to 14.36% in March 2024. This may imply changes in the company's tax structure or profitability drivers.
Furthermore, the net profit margin, representing the company's bottom line profitability, decreased from 15.84% in March 2023 to 10.99% in March 2024. This decline suggests that the company's net earnings relative to its total revenue have decreased over the quarters.
In summary, Solventum Corp.'s profitability ratios have shown some instability, with fluctuations in gross, operating, pretax, and net profit margins. Further analysis is needed to understand the underlying reasons for these variations and to assess the company's overall financial health.
Return on investment
| Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.44% | 10.88% | 11.50% | 11.36% | 12.15% |
| Return on assets (ROA) | 6.13% | 6.66% | 8.59% | 8.68% | 9.42% |
| Return on total capital | 39.87% | 45.88% | 49.11% | 41.02% | 14.12% |
| Return on equity (ROE) | 23.42% | 28.10% | 36.68% | 31.33% | 10.95% |
Solventum Corp.'s profitability ratios indicate a fluctuating performance over the past five quarters.
Operating return on assets (Operating ROA) has shown a general downward trend, decreasing from 12.15% in Q1 2023 to 10.44% in Q1 2024. This suggests that the company's operating income generated from its assets has been gradually declining.
Return on assets (ROA) has also exhibited variability, with the ratio fluctuating between 6.13% and 9.42% over the quarters. This metric indicates the overall profitability of the company in utilizing its assets efficiently to generate profits.
Return on total capital has been quite volatile, peaking at 49.11% in Q3 2023 but then dropping significantly to 39.87% in Q1 2024. This ratio reflects the company's ability to generate returns from both equity and debt capital invested in the business.
Return on equity (ROE) has shown a similar pattern of variability, ranging from 10.95% to 36.68% over the five quarters. ROE measures the company's ability to generate profits from shareholders' equity, with a higher ratio indicating better performance in maximizing shareholder value.
In conclusion, Solventum Corp.'s profitability ratios exhibit mixed performance trends, with fluctuations in key metrics like Operating ROA, ROA, Return on total capital, and ROE. Further analysis of the company's financial statements and business operations may be necessary to understand the drivers behind these fluctuations and assess the company's overall financial health.