CNH Industrial N.V. (CNH)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 31.79% | 28.68% | 57.79% | 24.54% | 22.25% |
| Operating profit margin | 19.05% | 17.06% | 10.91% | 8.11% | 9.97% |
| Pretax margin | 12.01% | 11.77% | 6.18% | -2.76% | 4.10% |
| Net profit margin | 9.60% | 8.62% | 5.15% | -3.34% | 5.06% |
Looking at the profitability ratios of CNH Industrial N.V. over the last five years, we observe the following trends:
1. Gross Profit Margin: The company's gross profit margin has been relatively stable, hovering around 20-30% between 2019 and 2023. There was a significant spike in 2021 to nearly 58%, indicating strong control over direct costs of goods sold. However, this dropped back to a more sustainable level in subsequent years.
2. Operating Profit Margin: CNH's operating profit margin has shown an increasing trend, demonstrating improved efficiency in managing operating expenses and generating operating income. The margin increased from 8.11% in 2020 to 19.05% in 2023, indicating enhanced operational performance.
3. Pretax Margin: The pretax margin has generally been positive over the last five years, except for a dip in 2020 when it turned negative. This suggests that CNH was able to generate pre-tax income in most years, with notable improvement in profitability in recent years.
4. Net Profit Margin: Similarly, the net profit margin has shown positive values except for a significant negative margin in 2020. The company rebounded strongly in 2021 with a net profit margin of 5.15%, showing a solid improvement in profitability.
Overall, CNH Industrial N.V. has demonstrated an improving trend in profitability, reflected in the increasing operating profit margin and net profit margin over the years. The company's ability to maintain stable gross profit margins also indicates efficient cost management. However, it is essential to monitor the sustainability of these trends and ensure continued profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.17% | 10.20% | 53.73% | 2.46% | 5.91% |
| Return on assets (ROA) | 5.12% | 5.15% | 25.38% | -1.01% | 3.00% |
| Return on total capital | 12.12% | 11.71% | 9.35% | 0.81% | 6.29% |
| Return on equity (ROE) | 28.80% | 29.09% | 25.14% | -9.80% | 23.10% |
CNH Industrial N.V.'s profitability ratios demonstrate a mixed performance over the past five years.
1. Operating return on assets (Operating ROA) has been relatively stable, with figures around 10% in the last three years. This ratio indicates that CNH Industrial N.V. is effectively generating operating income from its assets.
2. Return on assets (ROA) shows a similar trend, with positive values in the last three years. However, the negative figure in 2020 suggests that the company faced challenges in generating profits from its total assets during that period.
3. Return on total capital has shown an upward trend, reaching 12.12% in 2023. This indicates that the company is generating a higher return on the total capital invested in the business, reflecting efficient capital utilization.
4. Return on equity (ROE) has been fluctuating, with a significant decrease in 2020 followed by a recovery in the subsequent years. The positive figures in recent years suggest that CNH Industrial N.V. is generating solid returns for its shareholders despite the volatility.
Overall, while the company has demonstrated consistent performance in generating returns from operating activities and total capital, there have been fluctuations in returns on total assets and equity over the period under review. Continued monitoring of these ratios will be essential to assess CNH Industrial N.V.'s long-term profitability sustainability.