Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Alphabet Inc., profitability ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Alphabet Inc. gross profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Alphabet Inc. operating profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Alphabet Inc. net profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Alphabet Inc. ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Alphabet Inc. ROA deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Gross Profit Margin
Alphabet Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | 174,062) | 156,633) | 146,698) | 97,795) | 89,961) | |
| Revenues | 307,394) | 282,836) | 257,637) | 182,527) | 161,857) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 56.63% | 55.38% | 56.94% | 53.58% | 55.58% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Comcast Corp. | 69.76% | 68.53% | 66.96% | 68.02% | 68.39% | |
| Meta Platforms Inc. | 80.76% | 78.35% | 80.79% | 80.58% | 81.94% | |
| Netflix Inc. | 41.54% | 39.37% | 41.64% | 38.89% | 38.28% | |
| Walt Disney Co. | 33.41% | 34.24% | 33.06% | 32.89% | 39.60% | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 174,062 ÷ 307,394 = 56.63%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Alphabet Inc. gross profit margin ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level. |
Operating Profit Margin
Alphabet Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Income from operations | 84,293) | 74,842) | 78,714) | 41,224) | 34,231) | |
| Revenues | 307,394) | 282,836) | 257,637) | 182,527) | 161,857) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 27.42% | 26.46% | 30.55% | 22.59% | 21.15% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Comcast Corp. | 19.18% | 11.56% | 17.89% | 16.89% | 19.39% | |
| Meta Platforms Inc. | 34.66% | 24.82% | 39.65% | 38.01% | 33.93% | |
| Netflix Inc. | 20.62% | 17.82% | 20.86% | 18.34% | 12.92% | |
| Walt Disney Co. | 5.74% | 7.90% | 4.46% | -2.97% | 15.33% | |
| Operating Profit Margin, Sector | ||||||
| Media & Entertainment | 24.24% | 20.46% | 26.39% | 20.33% | 21.48% | |
| Operating Profit Margin, Industry | ||||||
| Communication Services | 22.22% | 16.70% | 22.45% | 16.35% | 19.85% | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Income from operations ÷ Revenues
= 100 × 84,293 ÷ 307,394 = 27.42%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Alphabet Inc. operating profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Net Profit Margin
Alphabet Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 73,795) | 59,972) | 76,033) | 40,269) | 34,343) | |
| Revenues | 307,394) | 282,836) | 257,637) | 182,527) | 161,857) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 24.01% | 21.20% | 29.51% | 22.06% | 21.22% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Comcast Corp. | 12.66% | 4.42% | 12.17% | 10.17% | 11.99% | |
| Meta Platforms Inc. | 28.98% | 19.90% | 33.38% | 33.90% | 26.15% | |
| Netflix Inc. | 16.04% | 14.21% | 17.23% | 11.05% | 9.26% | |
| Walt Disney Co. | 2.65% | 3.80% | 2.96% | -4.38% | 15.89% | |
| Net Profit Margin, Sector | ||||||
| Media & Entertainment | 19.82% | 15.14% | 23.20% | 17.27% | 18.28% | |
| Net Profit Margin, Industry | ||||||
| Communication Services | 16.68% | 11.47% | 18.71% | 11.50% | 14.63% | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net income ÷ Revenues
= 100 × 73,795 ÷ 307,394 = 24.01%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Alphabet Inc. net profit margin ratio deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Return on Equity (ROE)
Alphabet Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 73,795) | 59,972) | 76,033) | 40,269) | 34,343) | |
| Stockholders’ equity | 283,379) | 256,144) | 251,635) | 222,544) | 201,442) | |
| Profitability Ratio | ||||||
| ROE1 | 26.04% | 23.41% | 30.22% | 18.09% | 17.05% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Comcast Corp. | 18.61% | 6.63% | 14.73% | 11.66% | 15.78% | |
| Meta Platforms Inc. | 25.53% | 18.45% | 31.53% | 22.72% | 18.29% | |
| Netflix Inc. | 26.27% | 21.62% | 32.28% | 24.96% | 24.62% | |
| Walt Disney Co. | 2.37% | 3.31% | 2.25% | -3.43% | 12.44% | |
| ROE, Sector | ||||||
| Media & Entertainment | 21.29% | 16.62% | 23.69% | 14.90% | 16.36% | |
| ROE, Industry | ||||||
| Communication Services | 18.94% | 13.32% | 20.34% | 11.50% | 15.27% | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 73,795 ÷ 283,379 = 26.04%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Alphabet Inc. ROE deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |
Return on Assets (ROA)
Alphabet Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 73,795) | 59,972) | 76,033) | 40,269) | 34,343) | |
| Total assets | 402,392) | 365,264) | 359,268) | 319,616) | 275,909) | |
| Profitability Ratio | ||||||
| ROA1 | 18.34% | 16.42% | 21.16% | 12.60% | 12.45% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Comcast Corp. | 5.81% | 2.09% | 5.13% | 3.85% | 4.96% | |
| Meta Platforms Inc. | 17.03% | 12.49% | 23.72% | 18.29% | 13.86% | |
| Netflix Inc. | 11.10% | 9.24% | 11.48% | 7.03% | 5.49% | |
| Walt Disney Co. | 1.15% | 1.54% | 0.98% | -1.42% | 5.70% | |
| ROA, Sector | ||||||
| Media & Entertainment | 11.82% | 9.07% | 13.02% | 8.04% | 8.75% | |
| ROA, Industry | ||||||
| Communication Services | 7.94% | 5.43% | 8.36% | 4.69% | 6.30% | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 73,795 ÷ 402,392 = 18.34%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Alphabet Inc. ROA deteriorated from 2021 to 2022 but then slightly improved from 2022 to 2023. |