Howmet Aerospace Inc (HWM)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 31.10% | 28.12% | 27.55% | 27.67% | 26.26% |
| Operating profit margin | 21.98% | 18.12% | 16.23% | 15.04% | 11.90% |
| Pretax margin | 18.61% | 14.68% | 10.70% | 6.52% | 3.25% |
| Net profit margin | 15.55% | 11.52% | 8.28% | 5.19% | 4.96% |
The profitability ratios of Howmet Aerospace Inc indicate a positive trend over the years. The gross profit margin has shown consistent improvement, increasing from 26.26% in 2020 to 31.10% in 2024, reflecting the company's ability to effectively manage its production costs.
The operating profit margin has also demonstrated significant growth, rising from 11.90% in 2020 to 21.98% in 2024. This suggests improved operational efficiency and cost management practices within the organization.
Moreover, the pretax margin has experienced substantial expansion, climbing from 3.25% in 2020 to 18.61% in 2024, indicating enhanced profitability before accounting for taxes.
Furthermore, the net profit margin has exhibited a notable increase from 4.96% in 2020 to 15.55% in 2024, illustrating the company's ability to generate higher profits after all expenses have been accounted for.
Overall, the profitability ratios of Howmet Aerospace Inc reflect a favorable trend, showcasing improved efficiency, cost management, and profitability over the 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) | 15.52% | 11.54% | 8.96% | 7.32% | 5.47% |
| Return on assets (ROA) | 10.98% | 7.34% | 4.57% | 2.52% | 2.28% |
| Return on total capital | 34.37% | 29.55% | 27.63% | 23.52% | 15.42% |
| Return on equity (ROE) | 25.36% | 18.95% | 13.02% | 7.35% | 7.29% |
Based on the provided data, we can analyze Howmet Aerospace Inc's profitability ratios as follows:
1. Operating Return on Assets (Operating ROA):
- The Operating Return on Assets (Operating ROA) shows the company's operating income generated for each dollar of assets.
- Howmet Aerospace's Operating ROA has been increasing consistently over the years, from 5.47% in 2020 to 15.52% in 2024.
- This indicates that the company has been growing its operational efficiency and profitability in utilizing its assets to generate operating income.
2. Return on Assets (ROA):
- The Return on Assets (ROA) ratio measures the overall profitability of the company, including both operating and non-operating activities.
- Howmet Aerospace's ROA has also shown a positive trend, increasing from 2.28% in 2020 to 10.98% in 2024.
- This suggests that the company has been effectively utilizing its assets to generate profits for its shareholders.
3. Return on Total Capital:
- The Return on Total Capital ratio reflects the company's ability to generate returns for both equity and debt holders.
- Howmet Aerospace's Return on Total Capital has demonstrated a steady increase from 15.42% in 2020 to 34.37% in 2024.
- This signifies the company's efficient use of both debt and equity to generate higher returns on invested capital.
4. Return on Equity (ROE):
- The Return on Equity (ROE) ratio specifically focuses on the returns generated for the company's shareholders.
- Howmet Aerospace's ROE has exhibited a growth trajectory, rising from 7.29% in 2020 to 25.36% in 2024.
- This indicates that the company has been successful in increasing shareholder value over the years through efficient management of equity investments.
Overall, the increasing trend in these profitability ratios reflects Howmet Aerospace Inc's improving operational efficiency, asset utilization, and overall profitability, which could be deemed favorable by investors and stakeholders.