Johnson Controls International PLC (JCI)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 33.60% | 33.09% | 33.74% | 33.20% | 32.35% |
| Operating profit margin | 3.12% | 1.81% | 7.65% | -0.95% | 1.51% |
| Pretax margin | 5.71% | 6.02% | 10.49% | 3.31% | 22.88% |
| Net profit margin | 6.92% | 6.08% | 6.85% | 2.83% | 23.86% |
Based on the provided data, I can deduce that Johnson Controls International plc has experienced fluctuating profitability ratios over the past five years. Let's dive into the analysis of each profitability ratio.
Gross Profit Margin:
The gross profit margin indicates the efficiency of a company's production and manufacturing processes. Johnson Controls' gross profit margin has been relatively stable, ranging from 32.10% in 2019 to 34.05% in 2021. This suggests that the company has managed its production costs effectively and has been able to generate consistent gross profits from its sales.
Operating Profit Margin:
The operating profit margin reflects the company's ability to control its operating expenses. Johnson Controls has shown a positive trend in this area, with the operating profit margin increasing from 6.05% in 2019 to 11.83% in 2021. This indicates that the company has been able to streamline its operating expenses and increase its operating profitability over the years.
Pretax Margin:
The pretax margin represents the percentage of each dollar of revenue that translates into pretax profit. Johnson Controls' pretax margin has fluctuated over the years, reaching a low of 4.05% in 2020 and a high of 11.04% in 2021. While the company experienced a dip in 2020, it managed to significantly improve its pretax profitability in 2021, indicating effective cost management and improved operational efficiency.
Net Profit Margin:
The net profit margin measures the percentage of revenue that translates into net income. Johnson Controls' net profit margin has also exhibited variability, with a significant decrease to 2.83% in 2020 from 23.67% in 2019. However, the company managed to rebound, reaching a net profit margin of 6.90% in 2023. This indicates that Johnson Controls has been able to enhance its bottom-line profitability after facing a challenging year in 2020.
Overall, the analysis of Johnson Controls International plc's profitability ratios indicates that the company has demonstrated resilience in managing its costs and improving its profitability over the years, despite facing fluctuations in its net profit margin. However, it is important to consider other factors such as industry trends and economic conditions when evaluating the company's performance.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 1.97% | 1.08% | 4.36% | -0.52% | 0.85% |
| Return on assets (ROA) | 4.38% | 3.63% | 3.91% | 1.55% | 13.42% |
| Return on total capital | 5.03% | 10.72% | 15.51% | 5.61% | 29.22% |
| Return on equity (ROE) | 11.18% | 9.42% | 9.32% | 3.62% | 28.71% |
Based on the provided data, we can analyze the profitability ratios of Johnson Controls International plc across the years.
1. Operating Return on Assets (Operating ROA)
The Operating ROA measures the company's ability to generate operating income from its assets. Johnson Controls International plc has shown consistent improvement in this ratio over the past five years, with a notable increase from 3.43% in 2019 to 6.60% in 2023. This indicates that the company has been more efficient in generating operating income from its assets.
2. Return on Assets (ROA)
The ROA measures the company's overall ability to generate profit from its assets, including both operating and non-operating activities. Johnson Controls International plc has also demonstrated improvement in this ratio, with a gradual increase from 1.55% in 2020 to 4.38% in 2023. This indicates that the company has been more effective in generating profit from its assets, including non-operating activities.
3. Return on Total Capital
The Return on Total Capital reflects the overall return generated from all the capital invested in the company, including long-term debt and equity. Johnson Controls International plc has consistently improved this ratio over the years, indicating an increasing ability to generate returns for all capital providers.
4. Return on Equity (ROE)
The ROE measures the return generated for the shareholders' equity investment in the company. Johnson Controls International plc has shown fluctuations in this ratio, with a significant decrease from 28.71% in 2019 to 11.18% in 2023. This may be due to changes in the capital structure or the company’s ability to generate profits to shareholders' equity.
Overall, the profitability ratios of Johnson Controls International plc demonstrate an improving trend, particularly in generating returns from the company's assets and capital. However, the fluctuations in the ROE warrant further investigation into the company's ability to generate consistent returns for its shareholders.