AAR Corp (AIR)
Profitability ratios
Return on sales
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 19.46% | 18.71% | 17.25% | 16.96% | 13.05% |
| Operating profit margin | 5.35% | 6.82% | 5.83% | 4.55% | 1.25% |
| Pretax margin | 2.57% | 6.15% | 5.80% | 3.32% | 0.48% |
| Net profit margin | 2.04% | 4.56% | 4.33% | 2.20% | 0.21% |
AAR Corp's profitability ratios have shown a mixed trend over the past five years. The gross profit margin has been increasing steadily, reaching 19.46% in 2024, indicating that the company is effectively managing its production costs.
However, the operating profit margin has fluctuated between 4.55% and 6.82% during the same period, suggesting some variability in the company's operating efficiency. The downward trend in 2024 to 5.35% may raise concerns about the company's ability to control its operating expenses.
The pretax margin has also varied, with a significant increase in 2023 to 6.15% followed by a decrease to 2.57% in 2024. This fluctuation indicates potential fluctuations in the company's non-operating income or expenses.
The net profit margin, which represents the bottom line profitability, has shown growth over the years but decreased to 2.04% in 2024. This suggests that while the company's net income is increasing, it is facing challenges in maintaining profitability in relation to revenue.
Overall, while AAR Corp has shown improvement in its gross profit margin, there are some fluctuations in the operating profit margin and pretax margin that may warrant further investigation into the company's cost management and overall financial performance.
Return on investment
| May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | May 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.39% | 7.35% | 6.72% | 4.81% | 1.24% |
| Return on assets (ROA) | 1.67% | 4.92% | 5.00% | 2.33% | 0.21% |
| Return on total capital | 4.67% | 9.77% | 9.50% | 5.32% | 1.28% |
| Return on equity (ROE) | 3.89% | 8.21% | 7.61% | 3.67% | 0.49% |
AAR Corp's profitability ratios show a mixed performance over the past five years.
Operating return on assets (Operating ROA) has decreased from 7.35% in 2023 to 4.39% in 2024, indicating a decline in the company's ability to generate operating profits from its assets.
Return on assets (ROA) similarly decreased from 4.92% in 2023 to 1.67% in 2024, suggesting that the overall profitability of the company in relation to its total assets has declined significantly.
The return on total capital has also seen a decrease, dropping from 9.77% in 2023 to 4.67% in 2024. This indicates a decrease in the company's ability to generate returns from both equity and debt capital.
Return on equity (ROE) has shown a downward trend as well, decreasing from 8.21% in 2023 to 3.89% in 2024. This signifies a decrease in the company's ability to generate profits from shareholder equity.
Overall, the declining trend in profitability ratios for AAR Corp over the past five years indicates potential challenges in generating profits relative to the company's assets, capital, and equity. Analyzing the reasons behind these declines and implementing strategies to improve profitability will be critical for the company's future financial performance.