Lear Corporation (LEA)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 51.55% | 51.99% | 52.24% | 3.20% | 4.33% |
| Operating profit margin | 1.99% | 1.54% | 1.73% | 1.31% | 2.66% |
| Pretax margin | 1.61% | 1.09% | 1.31% | 0.73% | 2.24% |
| Net profit margin | 1.22% | 0.77% | 0.96% | 0.46% | 1.88% |
Lear Corp.'s profitability ratios have shown fluctuations over the past five years. The gross profit margin has varied between 6.51% and 8.77%, with a slight increase from 6.75% in 2022 to 7.29% in 2023. This implies that the company has been able to effectively control its cost of goods sold.
The operating profit margin also experienced changes, ranging from 2.66% to 5.40%. In 2023, it improved to 3.98% compared to 3.13% in 2022, indicating a better ability to manage operating expenses and generate operating income.
Similarly, the pretax margin, reflecting profitability before taxes, has fluctuated between 1.92% and 4.93%. It increased slightly from 2.60% in 2022 to 3.52% in 2023. This suggests that Lear Corp. has been able to enhance its income before tax relative to revenue.
The net profit margin, which assesses profitability after all expenses, has ranged from 0.93% to 3.99%. The margin improved from 1.57% in 2022 to 2.44% in 2023, demonstrating the company's ability to control operating expenses and interest payments to generate profit for shareholders.
Overall, while there have been fluctuations in profitability ratios, Lear Corp. has shown positive trends in 2023 compared to the previous year, indicating improved operational efficiency and financial performance.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.35% | 4.75% | 5.06% | 3.44% | 8.44% |
| Return on assets (ROA) | 3.90% | 2.38% | 2.80% | 1.20% | 5.94% |
| Return on total capital | 11.57% | 7.69% | 8.03% | 4.96% | 14.93% |
| Return on equity (ROE) | 11.64% | 7.00% | 8.05% | 3.55% | 17.33% |
Lear Corp.'s profitability ratios show varying trends over the past five years.
- Operating return on assets (Operating ROA) has shown improvement from 2019 to 2023, with a peak at 8.44% in 2019, a drop in 2020, and a steady increase thereafter, reaching 6.35% in 2023. This indicates that the company is becoming more efficient in generating operating profits from its assets.
- Return on assets (ROA) has fluctuated during the same period, with a significant decrease in 2020 to 1.20%, followed by an upward trend to 3.90% in 2023. This ratio reflects the company's ability to generate profits from its total assets, including non-operating assets.
- Return on total capital has also shown an upward trend, increasing from 7.12% in 2020 to 12.78% in 2023. This ratio indicates the overall profitability of the company's investments made by both equity and debt holders.
- Return on equity (ROE) has followed a similar pattern, with a decrease to 3.55% in 2020, followed by an upward trend, reaching 11.64% in 2023. ROE reflects the company's ability to generate profits from shareholders' equity.
Overall, Lear Corp. has shown improvements in its profitability ratios in recent years, indicating a potential increase in operational efficiency and profitability. However, it is essential to continue monitoring these ratios to ensure sustained positive performance.