Howmet Aerospace Inc (HWM)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 15.71% | 13.40% | 7.34% | 5.12% | 1.57% |
| Operating profit margin | 18.73% | 16.92% | 16.39% | 12.83% | 4.17% |
| Pretax margin | 15.18% | 11.15% | 7.10% | 4.53% | 3.99% |
| Net profit margin | 11.91% | 8.63% | 5.65% | 5.35% | 3.39% |
The profitability ratios of Howmet Aerospace Inc have shown a positive trend over the past five years. The gross profit margin, which measures the percentage of revenue remaining after deducting the cost of goods sold, has been steadily increasing from 20.89% in 2019 to 28.12% in 2023. This indicates an improvement in the company's ability to generate profit from its core operations.
Similarly, the operating profit margin, which reflects the proportion of revenue remaining after deducting operating expenses, has also been on an upward trajectory, reaching 18.46% in 2023 from 11.66% in 2019. This suggests that the company has been effectively managing its operating costs and increasing operational efficiency.
The pretax margin, which shows the percentage of revenue remaining after deducting all operating expenses and before taking into account taxes, has also seen significant growth, reaching 14.68% in 2023 compared to 4.05% in 2019. This indicates an improvement in the company's overall profitability before tax obligations.
Finally, the net profit margin, which represents the percentage of revenue that translates into net income after all expenses including taxes, has shown a consistent increase year over year, reaching 11.49% in 2023 from 3.36% in 2019. This implies that the company has been successful in effectively managing its expenses and increasing its bottom line profitability.
Overall, the profitability ratios of Howmet Aerospace Inc demonstrate a positive trend, indicating improving profitability and efficiency in the company's operations 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) | 11.54% | 8.96% | 7.32% | 5.47% | 3.30% |
| Return on assets (ROA) | 7.34% | 4.57% | 2.52% | 2.28% | 2.68% |
| Return on total capital | 15.83% | 10.76% | 7.54% | 6.50% | 9.39% |
| Return on equity (ROE) | 18.95% | 13.02% | 7.35% | 7.30% | 10.24% |
From the provided data, we can see a positive trend in Howmet Aerospace Inc's profitability ratios over the last five years.
1. Operating return on assets (Operating ROA) has shown a consistent improvement from 9.42% in 2019 to 11.76% in 2023. This indicates that the company is generating more operating income for each dollar of assets employed in its operations.
2. Return on assets (ROA) has also shown a steady increase over the years, reaching 7.32% in 2023. This ratio reflects the overall profitability of the company in generating earnings from its total assets.
3. Return on total capital has increased to 15.83% in 2023 from 15.69% in 2019, showing that the company is effectively utilizing its total capital to generate returns for its investors and creditors.
4. Return on equity (ROE) has experienced significant growth, reaching 18.90% in 2023 from 10.35% in 2019. This indicates that Howmet Aerospace Inc is efficiently utilizing shareholders' equity to generate profits.
Overall, the increasing trend in profitability ratios suggests that Howmet Aerospace Inc is effectively managing its assets, capital, and equity to enhance profitability and create value for its stakeholders. It indicates a strong financial performance and efficiency in utilizing resources.