Goodyear Tire & Rubber Co (GT)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 19.61% | 17.49% | 18.51% | 21.66% | 16.10% |
| Operating profit margin | 4.87% | 0.36% | 4.24% | 5.68% | -2.65% |
| Pretax margin | 0.82% | -3.37% | 1.92% | 2.94% | -9.25% |
| Net profit margin | 0.32% | -3.43% | 0.97% | 4.37% | -10.15% |
Goodyear Tire & Rubber Co's profitability ratios have shown fluctuations over the years.
1. Gross Profit Margin: Goodyear's gross profit margin has ranged from 16.10% in 2020 to 21.66% in 2021, with a slight decrease to 18.51% in 2022. In 2023 and 2024, the margin further decreased to 17.49% and then increased to 19.61%, indicating variability in the company's ability to generate profit after accounting for the cost of goods sold.
2. Operating Profit Margin: The operating profit margin of Goodyear Tire & Rubber Co was negative at -2.65% in 2020, signifying that the company's operating expenses exceeded its gross profit. However, there was a positive turnaround in 2021 with a margin of 5.68%, which slightly dipped to 4.24% in 2022. The margin further decreased in 2023 to 0.36% but improved in 2024 to 4.87%.
3. Pretax Margin: The pretax margin of Goodyear has been negative in 2020 and 2023, indicating that the company's expenses exceeded its revenue before tax in those years. However, there was a positive pretax margin of 2.94% in 2021, which slightly decreased to 1.92% in 2022 and further improved to 0.82% in 2024.
4. Net Profit Margin: Goodyear experienced a negative net profit margin of -10.15% in 2020, implying the company incurred a net loss relative to its revenue. The net profit margin turned positive in 2021 at 4.37%, but then fell to 0.97% in 2022. In 2023, the margin was negative again at -3.43%, but it improved to 0.32% in 2024.
Overall, while Goodyear saw improvements in profitability metrics in some years, there were fluctuations across different margins over the period. The company's ability to manage costs and enhance revenue generation will be critical for sustaining profitability in the coming years.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 4.39% | 0.34% | 3.94% | 4.64% | -1.98% |
| Return on assets (ROA) | 0.29% | -3.19% | 0.90% | 3.57% | -7.57% |
| Return on total capital | 13.80% | -3.11% | 16.79% | 18.78% | -25.67% |
| Return on equity (ROE) | 1.22% | -14.76% | 3.81% | 15.28% | -40.61% |
Based on the data provided for Goodyear Tire & Rubber Co, we can analyze the profitability ratios as follows:
1. Operating return on assets (Operating ROA):
- The Operating ROA for Goodyear has shown a fluctuating trend over the years, ranging from -1.98% in 2020 to 4.64% in 2021, and then decreasing to 0.34% in 2023. In 2024, it improved to 4.39%. This ratio measures how effectively the company is generating operating profit from its assets.
2. Return on assets (ROA):
- The ROA also displays variability, with negative values seen in 2020 and 2023 (-7.57% and -3.19% respectively). However, there was an improvement in 2021 and 2024 with values of 3.57% and 0.29% respectively. ROA indicates the company's ability to generate profit from its total assets.
3. Return on total capital:
- The return on total capital for Goodyear ranged from -25.67% in 2020 to a peak of 18.78% in 2021. Subsequently, it decreased to -3.11% in 2023 before recovering to 13.80% in 2024. This ratio assesses the return the company earns on the total invested capital.
4. Return on equity (ROE):
- The ROE for Goodyear has shown significant variability, with a low of -40.61% in 2020, an increase to 15.28% in 2021, and then a decline to 1.22% in 2024. This ratio evaluates how efficiently the company is utilizing shareholders' equity to generate profit.
Overall, the profitability ratios of Goodyear Tire & Rubber Co reflect a mix of positive and negative trends over the years, indicating the company's fluctuating performance in terms of generating profits in relation to its assets, capital, and equity. It is important for investors and stakeholders to monitor these ratios closely to assess the company's financial health and performance.