TE Connectivity Ltd (TEL)
Profitability ratios
Return on sales
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 31.68% | 32.34% | 32.87% | 30.81% | 32.84% |
| Operating profit margin | 14.44% | 17.00% | 16.37% | 4.43% | 14.78% |
| Pretax margin | 14.25% | 16.86% | 16.04% | 4.47% | 13.67% |
| Net profit margin | 11.97% | 14.97% | 15.21% | -1.99% | 13.78% |
TE Connectivity Ltd's profitability ratios have shown fluctuations over the past five years. The gross profit margin has been relatively stable, ranging from 30.81% to 32.87%, with a slight decrease in the most recent year to 31.68%. The operating profit margin has also varied, with a significant increase in 2022 to 17.00% but a noticeable decline in 2023 to 14.44%.
The company's pretax margin has generally increased over the years except for a slight dip in 2023 to 14.25%. This indicates that TE Connectivity Ltd has been able to control its operating expenses more effectively. The net profit margin has shown more volatility, with a substantial improvement from a negative margin in 2020 to 11.97% in 2023, suggesting improved profitability and cost management.
Overall, while TE Connectivity Ltd has demonstrated an ability to maintain a healthy level of profitability, there have been fluctuations in its margins over the years. It would be important for the company to focus on sustaining and potentially improving its profit margins to ensure long-term financial health and sustainability.
Return on investment
| Sep 30, 2023 | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2020 | Sep 30, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.61% | 13.26% | 11.34% | 2.79% | 10.04% |
| Return on assets (ROA) | 8.80% | 11.68% | 10.53% | -1.25% | 9.36% |
| Return on total capital | 15.61% | 19.73% | 17.02% | 4.56% | 13.58% |
| Return on equity (ROE) | 16.54% | 22.28% | 21.04% | -2.54% | 17.45% |
TE Connectivity Ltd's profitability ratios have shown varying trends over the last five years.
1. Operating Return on Assets (Operating ROA): This ratio indicates how efficiently the company generates profit from its assets. TE Connectivity's Operating ROA has fluctuated during the period, ranging from 2.79% in 2020 to a peak of 13.26% in 2022. In 2023, it stands at 10.61%, showing a slight decline from the previous year. Overall, the company has demonstrated relatively good operational efficiency in using its assets to generate operating income.
2. Return on Assets (ROA): The ROA reflects the company's overall profitability in relation to its total assets. TE Connectivity's ROA has ranged from a negative 1.25% in 2020 to a high of 11.68% in 2022. In 2023, the ROA is at 8.80%. Despite fluctuations, the company has generally managed to generate positive returns in relation to its total assets over the period.
3. Return on Total Capital: This ratio assesses the company's ability to generate returns for both equity and debt providers. TE Connectivity's Return on Total Capital has fluctuated, with the highest point being 19.73% in 2022 and the lowest at 4.56% in 2020. In 2023, the ratio stands at 15.61%, indicating a return above the cost of capital. The company has shown an ability to efficiently utilize its capital to generate returns for its providers.
4. Return on Equity (ROE): ROE measures the company's ability to generate profit from shareholders' equity. TE Connectivity's ROE has also shown fluctuations, with a negative value of -2.54% in 2020 and a peak of 22.28% in 2022. In 2023, the ROE is at 16.54%, reflecting a solid performance in generating returns for its equity shareholders over the period.
Overall, TE Connectivity Ltd has demonstrated the ability to generate profits and returns for its stakeholders, although with some variability in performance across the different profitability ratios. The company's trends in operating efficiency, overall profitability, capital utilization, and returns to equity holders provide insights into its financial performance over the years.