Forward Air Corporation (FWRD)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 13.73% | 24.09% | 27.71% | 21.98% | 18.05% |
| Operating profit margin | -42.96% | 6.44% | 13.48% | 9.58% | 5.82% |
| Pretax margin | -50.51% | 4.13% | 13.22% | 9.32% | 5.46% |
| Net profit margin | -33.02% | 12.21% | 9.79% | 6.37% | 4.16% |
Forward Air Corporation has shown a fluctuating trend in its profitability ratios over the past five years. The gross profit margin has varied from 18.05% in 2020 to 27.71% in 2022, indicating an improvement in the company's ability to generate profit from its core operations. However, there was a slight decline in 2023 to 24.09% and a significant drop in 2024 to 13.73%, which may raise concerns about the company's cost management or pricing strategies.
The operating profit margin exhibited an increasing trend from 5.82% in 2020 to 13.48% in 2022, reflecting improved operational efficiency. However, the margin declined sharply in 2023 to 6.44% and turned negative in 2024 at -42.96%, suggesting operational challenges or significant expenses impacting profitability.
Similarly, the pretax margin increased steadily from 5.46% in 2020 to 13.22% in 2022, indicating effective management of pre-tax earnings. Nonetheless, there was a notable decline in 2023 to 4.13% and a significant drop in 2024 to -50.51%, indicating a substantial decrease in profitability before accounting for taxes.
The net profit margin also followed an increasing trend from 4.16% in 2020 to 9.79% in 2022, reflecting an improvement in overall profitability after accounting for all expenses. However, the margin decreased in 2023 to 12.21% and experienced a sharp decline in 2024 to -33.02%, indicating a significant decrease in net profitability potentially due to extraordinary losses or a decline in revenue.
In conclusion, while Forward Air Corporation has demonstrated improvements in some profitability ratios over the years, the recent declines in margins, especially in 2024, raise concerns about the company's overall profitability and financial performance. Further analysis of the underlying factors driving these fluctuations would be necessary to assess the company's sustainability and future prospects.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -37.93% | 2.96% | 22.02% | 14.25% | 7.06% |
| Return on assets (ROA) | -29.15% | 5.62% | 15.99% | 9.47% | 5.04% |
| Return on total capital | -525.77% | 11.54% | 35.01% | 26.83% | 13.51% |
| Return on equity (ROE) | -404.99% | 21.90% | 27.32% | 17.83% | 9.64% |
Based on the profitability ratios of Forward Air Corporation, we observe the following trends over the years:
1. Operating return on assets (Operating ROA) has shown fluctuating performance. It increased from 7.06% in 2020 to 22.02% in 2022, indicating improved operational efficiency. However, it dropped to 2.96% in 2023 and significantly declined to -37.93% in 2024, suggesting challenges in generating operating income relative to assets.
2. Return on assets (ROA) experienced growth from 5.04% in 2020 to 15.99% in 2022, reflecting an increase in profitability relative to total assets. Nevertheless, the ratio declined to 5.62% in 2023 and dropped sharply to -29.15% in 2024, indicating a significant decrease in overall profitability and potential financial difficulties.
3. Return on total capital exhibited a similar trend, rising from 13.51% in 2020 to 35.01% in 2022, signaling efficient utilization of total capital. However, the ratio declined to 11.54% in 2023 and experienced a substantial negative return of -525.77% in 2024, indicating severe financial challenges and potential insolvency risks.
4. Return on equity (ROE) showed growth from 9.64% in 2020 to 27.32% in 2022, indicating an increasing return to shareholders' equity. Nonetheless, the ratio declined to 21.90% in 2023 and dropped drastically to -404.99% in 2024, suggesting significant losses exceeding equity, which may raise concerns among investors.
Overall, the profitability ratios highlight varying performance levels for Forward Air Corporation, with periods of growth followed by significant declines, signaling potential challenges in sustaining profitability and managing financial resources effectively. Investors and stakeholders may need to closely monitor the company's financial health and performance to assess its future prospects and risks.