Union Pacific Corporation (UNP)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 60.16% | 56.04% | 56.74% | 59.74% | 61.06% |
| Operating profit margin | 39.62% | 39.16% | 41.05% | 45.01% | 40.11% |
| Pretax margin | 35.87% | 35.50% | 37.55% | 40.87% | 35.73% |
| Net profit margin | 27.52% | 27.50% | 28.96% | 31.44% | 27.38% |
Based on the provided data, the profitability ratios of Union Pacific Corporation have shown some fluctuations over the years.
- Gross Profit Margin: The gross profit margin has decreased from 61.06% in 2020 to 56.04% in 2023 before improving slightly to 60.16% in 2024. This indicates that the company's cost of goods sold has increased relative to its revenue during the period.
- Operating Profit Margin: The operating profit margin has fluctuated over the years, with a significant increase in 2021 (45.01%) followed by a decline to 39.16% in 2023. The slight increase to 39.62% in 2024 suggests that the company's operating expenses have been managed more effectively.
- Pretax Margin: The pretax margin shows a similar pattern to the operating profit margin, with a peak of 40.87% in 2021 and subsequent declines in the following years. This indicates that the company's income before taxes relative to its revenue has been varying.
- Net Profit Margin: The net profit margin has also experienced fluctuations, with an increase to 31.44% in 2021 followed by decreases in the subsequent years. The net profit margin settled at 27.52% in 2024, reflecting the company's net income relative to its revenue.
Overall, while the profitability ratios of Union Pacific Corporation have shown some variability, the company has managed to maintain positive margins over the years, albeit with slight declines in some periods. It is important for investors and stakeholders to monitor these ratios to assess the company's profitability and financial performance.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 14.34% | 13.53% | 15.15% | 14.70% | 12.55% |
| Return on assets (ROA) | 9.96% | 9.50% | 10.69% | 10.27% | 8.57% |
| Return on total capital | 57.51% | 64.73% | 85.04% | 68.04% | 47.89% |
| Return on equity (ROE) | 39.95% | 43.14% | 57.54% | 46.06% | 31.54% |
Based on the provided data, we can analyze the profitability ratios of Union Pacific Corporation over the last five years.
1. Operating Return on Assets (Operating ROA):
- The Operating ROA shows the company's ability to generate operating income from its assets. It has been consistently improving over the years, from 12.55% in 2020 to 14.34% in 2024, with a slight dip in 2023. This indicates that the company has been effectively using its assets to generate operating profits.
2. Return on Assets (ROA):
- The ROA measures the company's overall efficiency in generating profits from its assets. Similarly to Operating ROA, the ROA has shown a positive trend over the years, increasing from 8.57% in 2020 to 9.96% in 2024. This indicates that Union Pacific Corporation has been effectively utilizing its assets to generate profits for its shareholders.
3. Return on Total Capital:
- The Return on Total Capital reflects the company's ability to generate profits from both equity and debt investments. Union Pacific Corporation's Return on Total Capital has shown fluctuations over the years, peaking at 85.04% in 2022 but decreasing to 57.51% in 2024. This may indicate changes in the company's capital structure or overall profitability.
4. Return on Equity (ROE):
- The ROE measures the return generated on shareholders' equity. Union Pacific Corporation has shown a strong ROE over the years, with values ranging from 31.54% in 2020 to 57.54% in 2022, before decreasing to 39.95% in 2024. This indicates that the company has been able to generate solid returns for its equity investors.
In conclusion, based on the profitability ratios analyzed, Union Pacific Corporation has generally shown improvements in its ability to generate profits from its assets, both operationally and overall, although there have been fluctuations in return on total capital and return on equity. Investors and stakeholders may find these trends insightful when evaluating the company's financial performance and future prospects.