Lumen Technologies Inc (LUMN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | -139.24% | -19.41% | 21.18% | -9.07% | -43.07% |
| Operating profit margin | -65.84% | 0.54% | 21.77% | 4.64% | -12.70% |
| Pretax margin | -70.32% | -5.67% | 13.72% | -3.78% | -22.21% |
| Net profit margin | -70.74% | -8.86% | 10.33% | -5.95% | -24.55% |
Lumen Technologies Inc's profitability ratios exhibit a fluctuating trend over the past five years.
Gross profit margin has been on a slight downward trajectory, starting from 55.02% in 2019 to 50.92% in 2023. This indicates a decrease in the percentage of revenue retained after accounting for the cost of goods sold.
Operating profit margin displayed significant volatility, with a peak of 21.77% in 2021, followed by a decline to 8.45% in 2023. This suggests fluctuations in the company's ability to control operating expenses and generate profits from its core business activities.
Pretax margin shows a wide range of values, from negative in 2020 and 2023 to positive in 2021. The negative pretax margins indicate periods of financial losses before accounting for taxes, while positive values indicate profitability before tax expenses.
Net profit margin also fluctuated significantly, with negative values in 2019, 2020, and 2023, and positive values in 2021 and 2022. This ratio reflects the company's ability to generate profits after accounting for all expenses, including taxes.
Overall, the company's profitability ratios suggest varying levels of financial performance over the past five years, indicating the need for a more in-depth analysis to understand the factors driving these fluctuations.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -28.17% | 0.21% | 7.39% | 1.62% | -4.21% |
| Return on assets (ROA) | -30.27% | -3.39% | 3.51% | -2.07% | -8.14% |
| Return on total capital | -45.12% | 1.11% | 10.43% | 7.94% | -20.38% |
| Return on equity (ROE) | -2,469.54% | -14.92% | 17.17% | -11.04% | -39.12% |
Profitability is a key aspect of assessing a company's financial performance, and Lumen Technologies Inc's profitability ratios provide valuable insights.
1. Operating return on assets (Operating ROA):
- Lumen's Operating ROA has shown a decreasing trend from 2019 to 2023, indicating a decline in the company's ability to generate operating income relative to its total assets. This may raise concerns about the company's operational efficiency and asset utilization.
2. Return on assets (ROA):
- The ROA for Lumen has been negative in recent years, with a significant decline in 2023. This suggests that the company is not effectively generating profits from its total assets, which could be a result of inefficient operations or high asset impairment charges.
3. Return on total capital:
- The return on total capital for Lumen has also experienced a decline in 2023 compared to previous years. While the ratio remains positive, the decreasing trend may indicate challenges in generating returns for both equity and debt holders.
4. Return on equity (ROE):
- Lumen's ROE has been highly volatile, with a substantial negative return in 2023. This implies that the company's ability to generate profits from shareholders' equity has been severely impacted, potentially due to high debt levels or losses incurred.
Overall, Lumen Technologies Inc's profitability ratios reflect deteriorating profitability trends, raising concerns about the company's ability to efficiently generate returns for its shareholders and investors. Further analysis and investigation into the underlying factors contributing to these ratios are essential to assess the company's financial health and sustainability.