CNH Industrial N.V. (CNH)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 32.70% | 31.79% | 29.61% | 27.68% | 17.51% |
| Operating profit margin | 19.41% | 20.03% | 18.50% | 16.93% | 6.67% |
| Pretax margin | 7.35% | 10.95% | 11.39% | 9.95% | -1.94% |
| Net profit margin | 6.28% | 9.22% | 8.61% | 8.84% | -1.89% |
Over the past five years, CNH Industrial N.V. has shown an improvement in its profitability ratios.
The Gross Profit Margin has steadily increased from 17.51% in December 2020 to 32.70% in December 2024, indicating that the company has been able to efficiently control the cost of goods sold while generating higher revenues.
Similarly, the Operating Profit Margin has seen significant growth, rising from 6.67% in December 2020 to 19.41% in December 2024. This suggests that CNH Industrial N.V. has been able to manage its operating expenses effectively and improve its operational efficiency.
The Pretax Margin reflects the company's profitability before accounting for taxes. While there was a negative pretax margin in December 2020, the trend reversed, and the margin improved to 7.35% by December 2024, signifying a positive turnaround in the company's overall financial performance.
Lastly, the Net Profit Margin, which indicates the portion of revenue that translates into net income, has shown a mixed trend. It increased from -1.89% in December 2020 to 9.22% in December 2023 but declined to 6.28% by December 2024. This decrease could indicate increased expenses or other factors affecting the company's bottom line.
Overall, the upward trajectory of the Gross Profit Margin, Operating Profit Margin, and Pretax Margin showcases CNH Industrial N.V.'s efforts to enhance its profitability and operational efficiency, although the slight decline in the Net Profit Margin towards the end of the period warrants further investigation.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.97% | 10.69% | 11.06% | 6.68% | 3.57% |
| Return on assets (ROA) | 2.90% | 4.92% | 5.15% | 3.49% | -1.01% |
| Return on total capital | 40.02% | 49.96% | 48.25% | 36.06% | 4.06% |
| Return on equity (ROE) | 16.29% | 28.33% | 29.29% | 25.42% | -10.05% |
CNH Industrial N.V. has displayed an improving trend in profitability ratios over the years. The Operating return on assets (Operating ROA) has increased from 3.57% in 2020 to 8.97% in 2024, indicating that the company has become more efficient in generating operating profit from its assets.
Similarly, the Return on assets (ROA) has also shown an upward trajectory, moving from -1.01% in 2020 to 2.90% in 2024. This suggests that CNH Industrial N.V. has been able to generate a positive return on its total assets over the years.
The Return on total capital has seen a significant improvement, surging from 4.06% in 2020 to 40.02% in 2024. This metric indicates the company's ability to generate profits from both equity and debt capital employed in the business.
Lastly, the Return on equity (ROE) has also shown a positive trend, increasing from -10.05% in 2020 to 16.29% in 2024. This signifies that CNH Industrial N.V. has been successful in generating returns for its shareholders over the years.
Overall, the company's profitability ratios demonstrate an upward trajectory, reflecting improving operational efficiency and the ability to generate returns for both assets and capital providers.