Teradyne Inc (TER)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 57.42% | 59.18% | 59.59% | 57.21% | 58.38% |
| Operating profit margin | 18.72% | 26.37% | 32.43% | 29.74% | 24.12% |
| Pretax margin | 19.64% | 26.64% | 31.35% | 28.87% | 22.91% |
| Net profit margin | 16.77% | 22.68% | 27.40% | 25.12% | 20.37% |
Teradyne, Inc.'s profitability ratios show some fluctuations over the past five years. The gross profit margin has been relatively consistent, ranging from 57.21% to 59.59%, with a slight decline in 2023 to 57.42%. This ratio indicates the company's ability to generate profits from its sales after deducting the cost of goods sold.
The operating profit margin, which reflects profitability before interest and taxes, has varied more significantly, peaking at 32.68% in 2021 and dropping to 19.52% in 2023. This could suggest changes in operating efficiency or cost management.
Similarly, the pretax margin has fluctuated, with a high of 31.35% in 2021 and a low of 19.64% in 2023. This ratio indicates the company's ability to generate profits before accounting for taxes.
The net profit margin, a key indicator of overall profitability, has shown a similar trend, ranging from 20.37% to 27.40% over the period. In 2023, the net profit margin decreased to 16.77%, possibly due to higher expenses or lower revenue relative to the previous year.
Overall, while Teradyne's profitability ratios have shown some variation, the company has demonstrated the ability to generate consistent profits over the analyzed period, albeit with fluctuations in margins. Further analysis would be needed to understand the underlying factors driving these changes and to assess the company's overall financial health and performance.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 14.37% | 23.76% | 31.52% | 25.42% | 19.87% |
| Return on assets (ROA) | 12.87% | 20.44% | 26.63% | 21.47% | 16.77% |
| Return on total capital | 20.96% | 34.44% | 44.45% | 35.81% | 29.23% |
| Return on equity (ROE) | 17.77% | 29.19% | 39.59% | 35.53% | 31.58% |
Teradyne, Inc. has shown a consistent trend of strong profitability over the five-year period from 2019 to 2023. The Operating return on assets (Operating ROA) has fluctuated, with a peak of 31.76% in 2021 and a low of 14.98% in 2023. This ratio indicates the company's ability to generate operating income from its assets, with higher values suggesting efficient asset utilization.
Return on assets (ROA) has also exhibited a positive trajectory, ranging from 16.77% in 2019 to 12.87% in 2023. ROA reflects the company's overall efficiency in using its assets to generate profits, and the values indicate that Teradyne has been successful in this aspect over the years.
Return on total capital and Return on equity (ROE) have generally shown an increasing trend, indicating the company's ability to generate profits from both equity and debt financing. The ROE values have ranged from 31.58% in 2019 to 17.77% in 2023, reflecting strong performance in utilizing shareholder equity to generate returns.
Overall, Teradyne's profitability ratios demonstrate a track record of efficiency and effectiveness in generating profits relative to its assets, capital, and equity over the five-year period, showing resilience and sound financial management practices.