Norfolk Southern Corporation (NSC)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 63.20% | 64.54% | 65.71% | 68.61% | 66.88% |
| Operating profit margin | 33.58% | 24.93% | 39.90% | 42.37% | 32.76% |
| Pretax margin | 27.46% | 20.29% | 34.27% | 36.95% | 27.61% |
| Net profit margin | 21.63% | 15.98% | 27.13% | 28.63% | 21.97% |
Based on the provided data, Norfolk Southern Corporation has shown varying profitability ratios over the years.
1. Gross Profit Margin:
- The company's gross profit margin has fluctuated between 63.20% to 68.61% over the period from 2020 to 2024, showing a general downward trend. This indicates that Norfolk Southern has been able to maintain relatively high profitability on its core business operations, though there has been some recent decline.
2. Operating Profit Margin:
- The operating profit margin of Norfolk Southern Corporation has shown more significant volatility, ranging from 24.93% to 42.37% during the same period. The peak in 2021 suggests improved operational efficiency, but the notable decrease in 2023 followed by an increase in 2024 indicates some fluctuations in profitability.
3. Pre-tax Margin:
- The pre-tax margin has also shown fluctuations, ranging from 20.29% to 36.95% over the five-year period. The decline in 2023 followed by a slight recovery in 2024 suggests the company faced some challenges in maintaining profitability before regaining ground.
4. Net Profit Margin:
- The net profit margin of Norfolk Southern Corporation has varied between 15.98% to 28.63%, indicating the company's ability to convert revenue into profit for shareholders. The dip in profitability in 2023 followed by a recovery in 2024 may signal a focus on cost management and efficiency improvements.
In conclusion, Norfolk Southern Corporation has experienced fluctuations in its profitability margins over the years, with some years showing improved profitability while others faced challenges. Investors and stakeholders should monitor these ratios closely to assess the company's financial performance and sustainability.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 9.32% | 6.84% | 12.37% | 11.55% | 7.91% |
| Return on assets (ROA) | 6.00% | 4.39% | 8.41% | 7.81% | 5.30% |
| Return on total capital | 28.91% | 23.80% | 37.87% | 33.16% | 21.33% |
| Return on equity (ROE) | 18.33% | 14.29% | 25.68% | 22.03% | 13.61% |
The profitability ratios of Norfolk Southern Corporation show a positive trend over the years, indicating an improvement in the company's profitability.
1. Operating return on assets (Operating ROA) has increased from 7.91% in 2020 to 12.37% in 2022 before declining to 9.32% in 2024. This ratio measures the operating income generated by the company relative to its total assets, suggesting that Norfolk Southern effectively utilized its assets to generate operating profits.
2. Return on assets (ROA) displays a similar pattern, rising from 5.30% in 2020 to 8.41% in 2022, then decreasing slightly to 6.00% in 2024. ROA indicates the overall profitability of the company in relation to its total assets, showcasing Norfolk Southern's ability to generate profits from its asset base.
3. Return on total capital has consistently increased from 21.33% in 2020 to 37.87% in 2022, reflecting the return earned on both debt and equity investments. The decline to 28.91% in 2024 still indicates efficient capital utilization by the company.
4. Return on equity (ROE) has followed a similar upward trajectory, climbing from 13.61% in 2020 to 25.68% in 2022, then settling at 18.33% in 2024. ROE demonstrates how effectively Norfolk Southern is generating profits from shareholder equity, showcasing a good return for equity investors.
Overall, Norfolk Southern Corporation's profitability ratios exhibit a generally positive performance, indicating effective management of assets and capital to generate profits for the company and its shareholders.