Lear Corporation (LEA)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 7.03% | 7.85% | 6.75% | 7.23% | 6.51% |
| Operating profit margin | 3.81% | 2.29% | 2.91% | 3.51% | 2.34% |
| Pretax margin | 3.14% | 3.31% | 2.44% | 3.03% | 1.76% |
| Net profit margin | 2.17% | 2.44% | 1.57% | 1.94% | 0.93% |
Based on the provided data, Lear Corporation's profitability ratios show a mixed performance over the five-year period from 2020 to 2024.
1. Gross Profit Margin: Lear Corporation's gross profit margin has seen some fluctuations during this period, starting at 6.51% in 2020 and peaking at 7.85% in 2023, with a slight decrease to 7.03% in 2024. Overall, the trend indicates a general improvement in the company's ability to generate profits after accounting for production costs.
2. Operating Profit Margin: The operating profit margin of Lear Corporation has shown an increasing trend, starting at 2.34% in 2020 and reaching 3.81% in 2024. This indicates that the company has been able to improve its operational efficiency and profitability over the years.
3. Pre-tax Margin: Lear Corporation's pre-tax margin has also displayed a positive trend, increasing from 1.76% in 2020 to 3.14% in 2024. This suggests that the company has been effective in managing its pre-tax profitability, potentially through cost control measures or revenue growth strategies.
4. Net Profit Margin: The net profit margin of Lear Corporation has demonstrated improvement over the period, rising from 0.93% in 2020 to 2.17% in 2024. This indicates that the company has been successful in managing its bottom line profitability after considering all expenses and taxes.
In conclusion, Lear Corporation has generally shown an improvement in its profitability ratios over the five-year period, with increasing margins in gross profit, operating profit, pre-tax profit, and net profit. This indicates a positive overall trend in the company's ability to generate profits and manage its costs effectively.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.33% | 3.65% | 4.42% | 5.06% | 3.02% |
| Return on assets (ROA) | 3.61% | 3.90% | 2.38% | 2.80% | 1.20% |
| Return on total capital | 29.30% | 21.43% | 12.54% | 13.99% | 12.86% |
| Return on equity (ROE) | 17.69% | 11.64% | 6.78% | 7.78% | 3.43% |
Lear Corporation's profitability ratios have shown a positive trend over the years based on the provided data.
1. Operating Return on Assets (Operating ROA): Lear Corporation's Operating ROA has increased from 3.02% in 2020 to 6.33% in 2024. This indicates that the company's operating income generated from its assets has been improving, reflecting efficient utilization of assets to generate profit.
2. Return on Assets (ROA): The ROA has also demonstrated growth, climbing from 1.20% in 2020 to 3.61% in 2024. This suggests that Lear Corporation has been increasingly effective in generating earnings from its total assets.
3. Return on Total Capital: Lear Corporation's Return on Total Capital has exhibited a substantial rise from 12.86% in 2020 to 29.30% in 2024. This significant increase indicates that the company has been able to generate higher returns from the total capital employed, which is favorable for the shareholders and reflects the company's ability to create value.
4. Return on Equity (ROE): Lear Corporation's ROE has also shown improvement, growing from 3.43% in 2020 to 17.69% in 2024. This highlights that the company's profitability in relation to shareholders' equity has been progressively increasing, signaling a stronger financial performance and potentially increasing shareholder value.
In summary, Lear Corporation has demonstrated positive momentum in its profitability ratios, indicating effective management of assets, capital, and equity to drive earnings growth and create value for its shareholders.