American Airlines Group (AAL)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 33.80% | 30.54% | 25.68% | 7.77% | -27.83% |
| Operating profit margin | 4.83% | 6.03% | 3.42% | -3.77% | -64.78% |
| Pretax margin | 2.13% | 2.23% | 0.40% | -9.07% | -71.20% |
| Net profit margin | 1.56% | 1.63% | 0.27% | -7.10% | -55.23% |
Based on the provided data, American Airlines Group has shown a significant improvement in its profitability ratios over the years.
1. Gross Profit Margin:
- The gross profit margin, which indicates the percentage of revenue retained after deducting direct costs, has shown a notable increase from -27.83% in December 2020 to 33.80% in December 2024. This indicates the company's ability to control its cost of goods sold and generate higher profits from its operations.
2. Operating Profit Margin:
- The operating profit margin, a measure of efficiency in managing operating expenses, improved from -64.78% in December 2020 to 4.83% in December 2024. This demonstrates American Airlines Group's progress in managing its operating costs and achieving profitability at the operational level.
3. Pretax Margin:
- The pretax margin, which shows the percentage of profits before tax expenses, has also shown a positive trend, moving from -71.20% in December 2020 to 2.13% in December 2024. This suggests that the company has been able to better manage its tax liabilities and increase its pre-tax profitability.
4. Net Profit Margin:
- The net profit margin, indicating the percentage of revenue converted to net income, improved from -55.23% in December 2020 to 1.56% in December 2024. This shows American Airlines Group's ability to control overall expenses, including interest and taxes, and generate net profits for its shareholders.
In summary, American Airlines Group has made significant progress in improving its profitability ratios over the years, reflecting better cost management, operational efficiency, and overall financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.23% | 4.81% | 2.48% | -1.59% | -16.81% |
| Return on assets (ROA) | 1.37% | 1.30% | 0.20% | -3.00% | -14.33% |
| Return on total capital | 10.12% | — | 7.38% | -2.49% | -40.65% |
| Return on equity (ROE) | — | — | — | — | — |
American Airlines Group has shown a mixed performance in terms of profitability ratios over the past five years.
1. Operating return on assets (Operating ROA): The Operating ROA has improved significantly from -16.81% in 2020 to 4.23% in 2024. This indicates that the company has been more efficient in generating operating income from its assets over the years.
2. Return on assets (ROA): The ROA has also shown an improvement, increasing from -14.33% in 2020 to 1.37% in 2024. This demonstrates that the company has been able to generate profits from its total assets, although the ratio still remains relatively low.
3. Return on total capital: The company experienced a notable recovery in Return on Total Capital, from -40.65% in 2020 to 10.12% in 2024. This indicates that the company has become more efficient in generating returns from its total invested capital.
4. Return on equity (ROE): The data provided does not show values for ROE, suggesting that the company's profitability in relation to shareholders' equity is not available in the dataset.
Overall, the profitability ratios of American Airlines Group have shown improvement over the years, reflecting better utilization of assets and capital to generate returns. However, there may still be room for further enhancement in profitability metrics to ensure sustained financial performance.