Textron Inc (TXT)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 91.57% | 92.24% | 91.01% | 90.94% | 8.22% |
| Operating profit margin | -14.82% | -14.15% | -17.07% | -21.11% | -98.53% |
| Pretax margin | 7.94% | 7.89% | 7.04% | 2.42% | 6.91% |
| Net profit margin | 6.73% | 6.69% | 6.02% | 2.65% | 5.98% |
Textron Inc's profitability ratios indicate a varying performance over the past five years. The gross profit margin has remained relatively high and stable, ranging from 90.94% to 92.24% in the last two years, reflecting the company's ability to effectively manage production costs and generate profits from its core business activities.
However, the operating profit margin shows a declining trend, with negative figures in recent years, indicating that the company's operating expenses have been impacting its profitability negatively. This may imply inefficiencies in cost management or operational challenges that need to be addressed by Textron Inc.
On a positive note, the pretax margin has shown improvement, with an increase from 2.42% in 2020 to 7.94% in 2023, indicating that the company has been able to manage its pre-tax profits more efficiently in recent years.
Similarly, the net profit margin has also shown a general upward trend, reaching 6.73% in 2023. This indicates that Textron Inc has been able to increase its profitability after accounting for all expenses, including taxes, and is managing its bottom line effectively.
Overall, while Textron Inc has demonstrated strong gross profit margins, there is a need to address the declining trend in operating profit margins to ensure sustainable profitability in the future. The company's efforts to improve pretax and net profit margins are positive signs, showing potential for enhanced financial performance in the coming years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | -12.03% | -11.18% | -13.36% | -15.93% | -89.43% |
| Return on assets (ROA) | 5.46% | 5.28% | 4.71% | 2.00% | 5.43% |
| Return on total capital | -29.03% | -25.60% | 14.88% | 7.66% | 20.17% |
| Return on equity (ROE) | 13.18% | 12.10% | 10.95% | 5.29% | 14.77% |
Based on the profitability ratios of Textron Inc over the past five years, we can observe the following trends:
1. Operating return on assets (Operating ROA) has shown fluctuations, ranging from -89.43% in 2019 to -12.03% in 2023. It indicates the company's ability to generate profit from its operational assets, with the recent improvement pointing towards better operational efficiency.
2. Return on assets (ROA) has been relatively stable, with a slight increase from 2.00% in 2020 to 5.46% in 2023. ROA measures the overall profitability of the company's assets, and the consistent improvement suggests effective asset utilization.
3. Return on total capital reflects significant fluctuations, from -29.03% in 2023 to 20.17% in 2019. The negative values in recent years indicate that the company is not efficiently generating returns on its total capital employed.
4. Return on equity (ROE) has also shown variability, with the highest value of 14.77% in 2019 and a recent ROE of 13.18% in 2023. ROE measures the return generated for its shareholders, and the positive trend highlights the company's ability to create value for its equity investors.
Overall, improvements in Operating ROA and ROA indicate enhanced operational efficiency and asset utilization, while the fluctuations in return on total capital and ROE suggest the need for further evaluation of the company's capital structure and financial performance.