GATX Corporation (GATX)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 57.94% | 52.63% | 54.92% | 32.22% | 43.81% |
| Operating profit margin | -14.56% | -20.64% | -21.46% | -44.05% | -45.89% |
| Pretax margin | 22.53% | 16.55% | 15.61% | 15.60% | 20.97% |
| Net profit margin | 18.37% | 12.25% | 11.38% | 12.51% | 17.57% |
The profitability ratios of GATX Corp. show a consistent trend of improvement over the past five years. The gross profit margin has remained strong at 100% throughout the period, indicating efficient cost management and pricing strategies.
The operating profit margin has gradually increased from 22.64% in 2019 to 27.5% in 2023, reflecting improved operational efficiency and effectiveness in generating profits from core business activities.
The pretax margin has also shown a positive trend, increasing from 15.51% in 2020 to 22.53% in 2023. This demonstrates the company's ability to effectively manage pre-tax expenses and generate higher profits before tax deductions.
Similarly, the net profit margin has shown improvement, increasing from 12.51% in 2020 to 18.37% in 2023. This indicates that after deducting all expenses including taxes, GATX Corp. is able to generate higher profits for its shareholders.
Overall, the consistent improvement in profitability ratios reflects GATX Corp.'s strong financial performance and effective management of costs and revenues over the past five 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) | -1.81% | -2.61% | -2.83% | -5.96% | -6.90% |
| Return on assets (ROA) | 2.29% | 1.55% | 1.50% | 1.69% | 2.64% |
| Return on total capital | 25.57% | 20.93% | 19.82% | 19.36% | 23.57% |
| Return on equity (ROE) | 11.40% | 7.68% | 7.09% | 7.73% | 11.51% |
The profitability ratios of GATX Corp. display varying trends over the past five years.
1. Operating Return on Assets (Operating ROA): This ratio measures the company's operating profit generated per dollar of assets. GATX Corp.'s Operating ROA has remained relatively stable around 3% over the period, indicating consistent operational efficiency in utilizing its assets to generate operating income.
2. Return on Assets (ROA): ROA assesses the company's overall profitability by determining the net income generated per dollar of total assets. GATX Corp.'s ROA has fluctuated, with a notable decline from 2.55% in 2019 to 1.55% in 2022 before recovering slightly in 2023 to 2.29%. This suggests a challenge in generating profits in relation to its asset base, though there are signs of improvement.
3. Return on Total Capital: This ratio measures the efficiency of the company in generating profits from all forms of capital, including debt and equity. GATX Corp.'s Return on Total Capital has also shown fluctuations, trending downwards from 5.90% in 2019 to 4.76% in 2023. This could indicate challenges in effectively utilizing all forms of capital to generate returns.
4. Return on Equity (ROE): ROE evaluates the company's profitability from the perspective of shareholders' equity. GATX Corp.'s ROE has faced some fluctuations over the period, with a notable decline in 2020 followed by a recovery in 2021 and 2022. The ROE of 11.40% in 2023 indicates that the company generated a return of 11.40% on every dollar of shareholders' equity, which is an improvement compared to 2020.
Overall, GATX Corp. has shown mixed performance in terms of profitability ratios, with some indicators remaining stable while others experiencing fluctuations. It is crucial for the company to focus on effectively utilizing its assets and capital to improve overall profitability and enhance returns for shareholders.