BorgWarner Inc (BWA)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 18.80% | 18.09% | 18.75% | 19.24% | 18.79% |
| Operating profit margin | 3.88% | 8.17% | 7.99% | 7.76% | 6.08% |
| Pretax margin | 3.19% | 6.44% | 9.78% | 4.63% | 8.82% |
| Net profit margin | 2.40% | 4.40% | 7.47% | 3.62% | 4.92% |
BorgWarner Inc's profitability ratios depict the company's ability to generate profits in relation to its revenue over the years.
1. Gross Profit Margin:
- BorgWarner's gross profit margin has ranged between 18.09% and 19.24% over the past five years, with a slight fluctuation.
- The company seems to have maintained a relatively stable gross profit margin, indicating efficient cost management in the production process.
2. Operating Profit Margin:
- The operating profit margin increased from 6.08% in 2020 to 8.17% in 2023 but dropped to 3.88% in 2024.
- The upward trend until 2023 suggests that BorgWarner effectively controlled its operating expenses and operating costs to improve profitability. However, the significant drop in 2024 indicates a potential issue that requires further investigation.
3. Pretax Margin:
- The pretax margin fluctuated from 3.19% in 2024 to 9.78% in 2022, with notable variability in profitability before taxes.
- Although BorgWarner managed to achieve a high pretax margin in 2022, the subsequent decline in 2024 may indicate challenges in managing tax and non-operating expenses.
4. Net Profit Margin:
- The net profit margin declined from 4.92% in 2020 to 2.40% in 2024, with variations in profitability over the years.
- BorgWarner's decreasing net profit margin could be a concern, suggesting potential difficulties in controlling all expenses and maintaining profitability at the bottom line.
In conclusion, while BorgWarner has shown some positive trends in profitability metrics, including improving operating profit margins until 2023, the decline in net profit margins and the operating profit margin in 2024 may indicate areas requiring attention to sustain and enhance profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 3.90% | 8.03% | 5.94% | 6.94% | 3.86% |
| Return on assets (ROA) | 2.42% | 4.32% | 5.55% | 3.24% | 3.12% |
| Return on total capital | 5.87% | 12.17% | 12.09% | 10.27% | 6.08% |
| Return on equity (ROE) | 6.11% | 10.72% | 13.07% | 7.73% | 7.78% |
BorgWarner Inc's profitability ratios show varying performance over the years.
- Operating return on assets (Operating ROA) increased from 3.86% in 2020 to 8.03% in 2023, then decreased to 3.90% in 2024. This ratio indicates the company's operating earnings generated per dollar of assets.
- Return on assets (ROA) fluctuated, with a peak of 5.55% in 2022 and a low of 2.42% in 2024. ROA measures the company's overall profitability relative to its total assets.
- Return on total capital peaked at 12.17% in 2023, reflecting the return generated from all capital sources. However, this ratio decreased to 5.87% in 2024, showing a decline in overall capital efficiency.
- Return on equity (ROE) saw a notable increase in 2022 to 13.07%, indicating improved returns to shareholders' equity. However, ROE declined to 6.11% in 2024, suggesting lower profitability relative to shareholders' equity.
Overall, while BorgWarner Inc experienced fluctuations in profitability ratios, it is essential to monitor these trends to assess the company's ability to generate returns for both investors and overall efficiency in utilizing its assets and capital.