Tenet Healthcare Corporation (THC)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 33.31% | 31.48% | 32.82% | 30.72% | 33.80% |
| Operating profit margin | 12.77% | 12.70% | 15.37% | 11.56% | 8.32% |
| Pretax margin | 4.67% | 4.11% | 7.09% | 1.76% | -0.39% |
| Net profit margin | 3.11% | 2.24% | 4.89% | 2.32% | -1.26% |
Tenet Healthcare Corp.'s profitability ratios over the past five years show varying levels of performance. The gross profit margin remained consistently strong at 100% throughout the period, indicating the company's ability to generate revenue and manage direct costs effectively.
The operating profit margin saw fluctuations but generally improved from 9.09% in 2019 to 12.45% in 2022, before slightly decreasing to 11.88% in 2023. This trend suggests that Tenet Healthcare Corp. was able to control its operating expenses and improve operational efficiency, resulting in higher profitability at the operating level.
The pretax margin also varied over the years, with a significant increase from 1.60% in 2019 to 9.60% in 2021, after which it decreased to 7.86% in 2023. This indicates that the company's profitability before taxes improved substantially in 2021 but then declined slightly in the subsequent years.
The net profit margin, representing the company's bottom-line profitability, ranged from a negative figure of -1.26% in 2019 to a peak of 4.65% in 2021. However, in 2023, the net profit margin decreased to 2.97%. This suggests that while Tenet Healthcare Corp. was able to generate profits in the recent years, there was a slight decline in net profitability in 2023.
Overall, Tenet Healthcare Corp. has demonstrated strong gross profit margins and improvements in operating and pre-tax margins over the years, indicating effective cost management and operational performance. However, the fluctuating net profit margins suggest some challenges in sustaining bottom-line profitability consistently.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.87% | 8.59% | 10.41% | 7.34% | 6.58% |
| Return on assets (ROA) | 2.16% | 1.51% | 3.31% | 1.47% | -0.99% |
| Return on total capital | 156.09% | 204.29% | 279.28% | 7,103.57% | — |
| Return on equity (ROE) | 38.00% | 35.99% | 88.91% | 1,425.00% | — |
Tenet Healthcare Corp.'s profitability ratios demonstrate fluctuations over the past five years.
Operating return on assets (Operating ROA) has shown a relatively stable performance, with values ranging from 7.19% in 2019 to 8.88% in 2022, before slightly decreasing to 8.63% in 2023. This ratio measures the company's operating income generated per dollar of assets, indicating its efficiency in utilizing assets to generate operating profits.
Return on assets (ROA) has fluctuated more significantly, with a negative value of -0.99% in 2019, increasing to 3.31% in 2021, before decreasing to 2.16% in 2023. ROA reflects the company's overall profitability by assessing the earnings generated from its total assets. The negative value in 2019 suggests that the company experienced losses during that period.
Return on total capital has generally been increasing, growing from 12.89% in 2019 to 16.20% in 2022, before slightly decreasing to 16.08% in 2023. This ratio evaluates the company's efficiency in generating returns on the total capital employed in its operations, including both debt and equity.
Return on equity (ROE) exhibits significant variability, ranging from 35.99% in 2022 to 1,425.00% in 2021. The ROE in 2023 was reported as 38.00%. ROE measures the return on equity investment, reflecting how effectively the company generates profits from shareholders' equity. The exceptionally high value in 2021 signals a significant increase in profitability in relation to shareholders' equity during that year.
In conclusion, the company's profitability ratios show mixed performance over the past five years, with some ratios demonstrating stability while others exhibit fluctuations. Further analysis and comparison with industry benchmarks may provide more insights into Tenet Healthcare Corp.'s financial performance.