Union Pacific Corporation (UNP)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 56.04% | 56.74% | 59.74% | 61.06% | 58.55% |
| Operating profit margin | 39.16% | 41.05% | 45.01% | 40.11% | 39.40% |
| Pretax margin | 35.50% | 37.55% | 40.87% | 35.73% | 35.69% |
| Net profit margin | 27.50% | 28.96% | 31.44% | 27.38% | 27.27% |
Union Pacific Corp. has shown consistent gross profit margins of 100% over the past five years, indicating strong efficiency in managing production costs. The operating profit margin declined slightly from 42.83% in 2021 to 37.65% in 2023, suggesting a decrease in operating efficiency or an increase in operating expenses during this period.
The pretax margin also decreased from 38.88% in 2021 to 34.13% in 2023, indicating a lower level of profitability before considering taxes. The net profit margin followed a similar trend, declining from 29.92% in 2021 to 26.45% in 2023. This may signal challenges in managing other expenses or higher tax liabilities impacting overall profitability.
Overall, while Union Pacific Corp. maintains a strong gross profit margin, there have been declining trends in operating, pretax, and net profit margins over the past three years, suggesting a potential need for the company to focus on cost management and operational efficiency to maintain or improve profitability in the future.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.53% | 15.15% | 14.70% | 12.55% | 13.87% |
| Return on assets (ROA) | 9.50% | 10.69% | 10.27% | 8.57% | 9.60% |
| Return on total capital | 64.73% | 85.04% | 68.04% | 47.89% | 48.53% |
| Return on equity (ROE) | 43.14% | 57.54% | 46.06% | 31.54% | 32.65% |
Over the past five years, Union Pacific Corp. has demonstrated consistent profitability as reflected in its key profitability ratios.
1. Operating return on assets (Operating ROA) shows the efficiency of the company in generating operating income relative to its total assets. The decreasing trend from 2019 to 2020 was reversed in subsequent years, indicating improved operational efficiency.
2. Return on assets (ROA) measures the overall profitability of the company in generating net income relative to its total assets. Although there was a slight fluctuation, the company maintained a stable ROA over the years, indicating effective asset utilization.
3. Return on total capital signifies the company's ability to generate returns for both shareholders and debt holders. The decreasing trend from 2019 to 2020 was followed by an upward trend in subsequent years, indicating better capital utilization and returns.
4. Return on equity (ROE) measures the profitability of the company from the perspective of equity shareholders. The significant increase in ROE from 2019 to 2022 highlights the company's effectiveness in generating profits for its equity holders.
Overall, Union Pacific Corp. has shown a strong performance in terms of profitability ratios, demonstrating efficient asset utilization and generating favorable returns for both investors and debt holders over the past five years.