Adient PLC (ADNT)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 6.71% | 5.71% | 6.04% | 4.67% | 4.85% |
| Operating profit margin | 0.38% | -1.18% | -0.63% | -4.83% | -2.71% |
| Pretax margin | 1.33% | -0.18% | 9.92% | -3.87% | -0.49% |
| Net profit margin | 1.33% | -0.85% | 8.10% | -4.32% | -2.97% |
Adient plc's profitability ratios provide valuable insight into the company's ability to generate profits from its core operations. Let's analyze the key profitability ratios for the last five years.
Gross Profit Margin:
The gross profit margin measures the proportion of revenue that exceeds the cost of goods sold. Adient plc's gross profit margin has shown an increasing trend over the past five years, from 4.85% in 2019 to 6.71% in 2023. This indicates that the company has been able to improve its efficiency in manufacturing and distributing its products.
Operating Profit Margin:
The operating profit margin reflects the company's ability to generate profits from its core business activities. Adient plc's operating profit margin has shown a significant improvement, increasing from 0.79% in 2019 to 3.11% in 2023. This indicates that the company has been successful in controlling its operating expenses and improving operational efficiency.
Pretax Margin:
The pretax margin measures the company's ability to generate profits before accounting for taxes. Adient plc's pretax margin has fluctuated over the years, with significant variations. From a negative pretax margin of -3.39% in 2020, the company has rebounded to a positive margin of 1.92% in 2023, indicating a substantial improvement in its profitability before taxes.
Net Profit Margin:
The net profit margin reflects the company's ability to generate profits after all expenses, including taxes and interest. Adient plc's net profit margin has also shown improvement, from negative margins in 2019 and 2020 to a positive net profit margin of 1.33% in 2023. This indicates that the company has managed to turn around its profitability and achieve positive bottom-line results.
Overall, the trend in Adient plc's profitability ratios demonstrates an improvement in the company's ability to generate profits, driven by better cost control and operational efficiency. However, the fluctuations in pretax and net profit margins in the past suggest the company's susceptibility to external factors and the need for continued focus on financial management.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 0.63% | -1.81% | -0.80% | -5.96% | -4.33% |
| Return on assets (ROA) | 2.18% | -1.31% | 10.28% | -5.33% | -4.75% |
| Return on total capital | 15.13% | 8.01% | 66.75% | -23.66% | 3.03% |
| Return on equity (ROE) | 9.20% | -5.79% | 46.63% | -45.09% | -26.57% |
Adient plc's profitability ratios provide insight into the company's ability to generate profits relative to its assets, capital, and equity.
Operating Return on Assets (Operating ROA):
Adient's Operating ROA has shown an improving trend over the past five years, indicating that the company has become more efficient in generating operating income from its assets. This is a positive sign as it suggests that the company is utilizing its assets more effectively to generate operating profits.
Return on Assets (ROA):
The ROA has fluctuated significantly over the past five years, with negative values in 2020 and 2021. However, there was a notable improvement in 2023 compared to the previous year. This ratio reflects the company's overall ability to generate profits from its assets, and the recent improvement indicates a better utilization of assets in generating profits.
Return on Total Capital:
Adient's return on total capital has shown a generally increasing trend over the period, indicating that the company has been able to generate higher returns in relation to the total capital employed. This suggests improved efficiency in utilizing both equity and debt capital to generate profits.
Return on Equity (ROE):
The return on equity has been quite volatile over the past five years, with negative values in 2020 and 2022. However, there has been a positive turnaround in 2023. This ratio indicates the company's ability to generate profits from shareholders' equity, and the recent improvement suggests a better utilization of equity in generating returns for the shareholders.
In conclusion, Adient plc's profitability ratios show improving trends in operating return on assets and return on total capital, indicating better efficiency in generating profits relative to assets and capital. However, the return on assets and return on equity have been more volatile, reflecting fluctuations in the company's ability to generate profits from its assets and shareholders' equity. It will be essential for the company to continue monitoring and improving these ratios to ensure sustained profitability.