Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Analysis of Solvency Ratios
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Operating Profit Margin since 2005
- Return on Equity (ROE) since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
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Profitability Ratios (Summary)
Monster Beverage Corp., 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).
- Gross profit margin
- The gross profit margin demonstrated a declining trend from 59.95% in 2019 to a low of 50.3% in 2022. In 2023, there was a moderate recovery to 53.14%, indicating some improvement in cost control or pricing strategies; however, the margin remains below the levels observed in the earlier years of the period.
- Operating profit margin
- The operating profit margin showed some fluctuations, starting at 33.4% in 2019 and increasing to a peak of 35.51% in 2020. Following this peak, the margin declined steadily to 25.11% in 2022 before a slight improvement to 27.36% in 2023. This pattern suggests increased operating expenses or reduced operational efficiency after 2020, with a partial recovery in the final year.
- Net profit margin
- The net profit margin mirrored the overall downward trend in profitability, beginning at 26.37% in 2019 and rising to 30.65% in 2020. It then experienced a notable decline to 18.88% in 2022. The margin recovered somewhat to 22.84% in 2023, yet still did not reach the earlier high point, reflecting pressures on the company’s bottom line despite some improvement in the latest period.
- Return on equity (ROE)
- Return on equity initially increased slightly from 26.56% in 2019 to 27.31% in 2020, followed by a continuous decrease reaching 16.96% in 2022. The measure improved to 19.82% in 2023, suggesting a rebound in shareholder returns, although performance has not fully recovered to prior levels. This trend indicates challenges in generating returns from equity, particularly after 2020.
- Return on assets (ROA)
- Return on assets followed a similar pattern to ROE, rising from 21.51% in 2019 to 22.73% in 2020 before declining to 14.37% in 2022. An increase to 16.84% in 2023 signals some recovery in asset efficiency, but overall, asset utilization became less effective over the analyzed period.
Return on Sales
Return on Investment
Gross Profit Margin
Monster Beverage Corp., 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 thousands) | ||||||
| Gross profit | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
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 ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit increased steadily over the analyzed period. From 2019 to 2023, gross profit rose from approximately $2.52 billion to $3.79 billion. This represents a significant absolute growth, reflecting the company's ability to enhance its earnings at the gross profit level.
- Net Sales
- Net sales demonstrated a continuous upward trend throughout the five years, growing from about $4.20 billion in 2019 to $7.14 billion in 2023. This consistent increase in sales indicates strong demand and expansion in market reach or volume.
- Gross Profit Margin
- The gross profit margin percentage declined overall during the period despite some fluctuations. Starting at approximately 59.95% in 2019, the margin dipped gradually to a low of 50.3% in 2022 before showing a partial recovery to 53.14% in 2023. This downward trend suggests rising costs relative to sales or changes in product mix, which impacted profitability efficiency at the gross margin level.
Operating Profit Margin
Monster Beverage Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Operating Profit Margin, Industry | ||||||
| Consumer Staples | ||||||
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 × Operating income ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Income
- The operating income showed a general upward trend over the five-year period, increasing from approximately 1.40 billion US dollars in 2019 to about 1.95 billion US dollars in 2023. There was consistent growth from 2019 through 2021, reaching close to 1.80 billion, followed by a decline in 2022 to around 1.58 billion, before rising again sharply in 2023. This pattern suggests some volatility in operational earnings but a strong recovery and growth by the end of the period.
- Net Sales
- Net sales experienced steady and significant growth throughout the timeframe. Starting from approximately 4.20 billion US dollars in 2019, sales increased each year, reaching over 7.14 billion US dollars by 2023. The growth in net sales was particularly notable in the later years, showing expanding revenue streams and potentially increased market demand or successful sales strategies.
- Operating Profit Margin
- The operating profit margin displayed a declining trend overall despite initial increases. It rose from 33.4% in 2019 to a peak of 35.51% in 2020 but then declined to 32.44% in 2021. The margin experienced a more significant reduction in 2022, dropping to 25.11%, before recovering slightly to 27.36% in 2023. This decline in margin suggests increasing costs or expenses relative to sales, impacting profitability despite rising revenue and operating income.
Net Profit Margin
Monster Beverage Corp., 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 thousands) | ||||||
| Net income | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| Net Profit Margin, Industry | ||||||
| Consumer Staples | ||||||
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 ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income demonstrated fluctuations over the analyzed period. It saw an increase from 1,107,835 thousand USD in 2019 to a peak of 1,409,594 thousand USD in 2020, followed by a slight decline to 1,377,475 thousand USD in 2021. In 2022, net income further decreased to 1,191,624 thousand USD before rising sharply to 1,630,988 thousand USD in 2023, marking the highest value in the period under review.
- Net Sales
- Net sales showed a consistent upward trend from 2019 through 2023. The figures increased steadily each year, starting at 4,200,819 thousand USD in 2019 and growing to 7,140,027 thousand USD by 2023. This continuous growth reflects expanding market reach or increased demand over the period.
- Net Profit Margin
- The net profit margin experienced variability across the years. Beginning at 26.37% in 2019, it rose to its highest point of 30.65% in 2020. Afterward, the margin declined significantly over the next two years, reaching a low of 18.88% in 2022. In 2023, the margin recovered moderately to 22.84%. This trend indicates fluctuations in profitability relative to sales, possibly influenced by changes in costs, pricing strategies, or operational efficiencies.
- Overall Insights
- While net sales consistently grew, net income and profit margin displayed more variability. The increase in sales was not always matched by proportional increases in net income, as seen in the decline in profit margin after 2020. However, the recovery in net income and margin in 2023 suggests improved profitability conditions. The data indicates the company's ability to grow revenues steadily but highlights challenges in maintaining consistent profitability ratios during the period.
Return on Equity (ROE)
Monster Beverage Corp., 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 thousands) | ||||||
| Net income | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| ROE, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| ROE, Industry | ||||||
| Consumer Staples | ||||||
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 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income exhibited a generally positive trend over the observed period. It increased from approximately $1.11 billion in 2019 to about $1.41 billion in 2020. Despite a slight decrease in 2021 and a further decline in 2022, falling to roughly $1.19 billion, net income rebounded significantly in 2023, reaching a peak of approximately $1.63 billion.
- Stockholders' Equity
- Stockholders' equity demonstrated consistent growth throughout the period. Starting at around $4.17 billion in 2019, equity increased steadily each year, culminating in approximately $8.23 billion in 2023. This reflects a substantial accumulation of equity over five years, nearly doubling the initial value.
- Return on Equity (ROE)
- The ROE showed a declining trend from 2019 through 2022. It began at 26.56% in 2019 and marginally increased to 27.31% in 2020. However, it then decreased notably to 20.98% in 2021, and further dropped to 16.96% by 2022. In 2023, ROE recovered moderately to 19.82%, although it remained below the levels observed early in the period.
- Overall Insights
- The financial data indicates growing equity alongside fluctuating profitability. The increase in net income in 2023 after two years of decline suggests an improved operational performance or favorable market conditions. Meanwhile, the reduction in ROE between 2020 and 2022 suggests a diminishing efficiency in generating profits from shareholder investments during that timeframe, possibly due to the rapid equity growth outpacing net income increases. The partial recovery of ROE in 2023 points to some rebalancing between profit generation and equity base growth.
Return on Assets (ROA)
Monster Beverage Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Coca-Cola Co. | ||||||
| Mondelēz International Inc. | ||||||
| PepsiCo Inc. | ||||||
| Philip Morris International Inc. | ||||||
| ROA, Sector | ||||||
| Food, Beverage & Tobacco | ||||||
| ROA, Industry | ||||||
| Consumer Staples | ||||||
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 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income demonstrated overall growth across the reported periods, increasing from 1,107,835 thousand USD in 2019 to 1,630,988 thousand USD in 2023. Notably, there was a peak in 2020 at 1,409,594 thousand USD, followed by a slight decline in 2021 and 2022 before rising significantly in 2023, reaching the highest value in the five-year span.
- Total Assets
- Total assets exhibited a consistent upward trend throughout the entire timeframe. Starting at 5,150,352 thousand USD in 2019, the total assets increased each year, reaching 9,686,522 thousand USD by the end of 2023. This represents a substantial accumulation of assets, with growth rates indicating steady expansion of the asset base.
- Return on Assets (ROA)
- Return on assets showed a fluctuating pattern with an initial increase from 21.51% in 2019 to 22.73% in 2020. However, after 2020, ROA declined gradually to a low of 14.37% in 2022, marking a decrease in efficiency in utilizing assets to generate profit. In 2023, ROA improved moderately to 16.84%, suggesting some recovery in asset profitability, although it remained below the earlier peak years.
- Overall Insights
- While net income and total assets both grew over the period, the declining trend in ROA post-2020 indicates that asset growth outpaced net income growth between 2021 and 2022, suggesting potential challenges in maintaining profit efficiency relative to asset size during that period. The rebound in ROA in 2023 alongside an increase in net income may imply improved operational performance or asset utilization after the dip, but efficiency levels had not yet returned to the earlier peaks.