Eaton Corporation PLC (ETN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 36.11% | 32.57% | 33.91% | 31.10% | 32.46% |
| Operating profit margin | 14.48% | 11.47% | 12.07% | 7.89% | 17.31% |
| Pretax margin | 16.54% | 14.14% | 14.39% | 9.67% | 12.20% |
| Net profit margin | 13.93% | 11.97% | 10.66% | 7.83% | 10.41% |
Eaton Corporation plc has shown a consistent improvement in its profitability ratios over the past five years. The gross profit margin has been increasing steadily, reaching 36.36% in 2023 from 32.97% in 2019. This trend indicates that the company has been effectively managing its cost of goods sold relative to its revenue.
The operating profit margin has also shown a positive trajectory, with a notable increase from 13.38% in 2019 to 16.75% in 2023. This suggests that Eaton Corporation plc has been able to control its operating expenses effectively while generating higher operating income.
Furthermore, the pretax margin has generally been on an upward trend, indicating efficient management of non-operating expenses and income. The net profit margin, which reflects the company's bottom-line profitability after accounting for all expenses, has shown consistent improvement, reflecting a strong performance in generating profit relative to revenue.
Overall, Eaton Corporation plc's profitability ratios demonstrate a positive trajectory, indicating effective cost management and operational efficiency, which have led to enhanced profitability over the years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.70% | 6.74% | 7.14% | 4.47% | 11.20% |
| Return on assets (ROA) | 8.37% | 7.03% | 6.30% | 4.43% | 6.74% |
| Return on total capital | 20.08% | 17.07% | 18.51% | 12.66% | 17.34% |
| Return on equity (ROE) | 16.90% | 14.45% | 13.06% | 9.44% | 13.75% |
Eaton Corporation plc's profitability ratios have shown a generally positive trend over the past five years. The Operating return on assets (Operating ROA) has improved consistently from 5.73% in 2020 to 10.11% in 2023, indicating the company's ability to generate operating profits from its assets has strengthened.
Similarly, the Return on assets (ROA) and Return on total capital have also shown an upward trajectory, reflecting the company's efficiency in generating profits relative to its total assets and capital employed. ROA has increased from 4.43% in 2020 to 8.37% in 2023, while Return on total capital has risen from 7.93% in 2020 to 13.73% in 2023.
Moreover, Eaton Corporation plc's Return on equity (ROE) has exhibited a positive trend, reaching 16.90% in 2023 from 9.44% in 2020. This indicates that the company has been able to deliver strong returns to its shareholders relative to the equity invested.
Overall, the profitability ratios suggest that Eaton Corporation plc's operational efficiency and ability to generate returns for both shareholders and capital providers have been improving steadily over the years, reflecting positively on the company's financial performance and strategy.