XPO Logistics Inc (XPO)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 49.47% | 49.83% | 20.38% | 28.13% | 87.31% |
| Operating profit margin | 8.14% | 5.66% | 4.88% | 4.33% | 1.57% |
| Pretax margin | 5.83% | 3.32% | 9.59% | 4.82% | 0.91% |
| Net profit margin | 4.77% | 2.44% | 8.63% | 4.67% | 1.78% |
XPO Logistics Inc's profitability ratios have shown fluctuations over the past five years. The gross profit margin decreased significantly from 87.31% in December 2020 to 20.38% in December 2022 but then rebounded to 49.47% by December 2024. This indicates a potential issue with cost management in 2022 followed by improvements in the later years.
The operating profit margin, which reflects the company's efficiency in managing its operating expenses, increased steadily from 1.57% in December 2020 to 8.14% by December 2024. This suggests that XPO Logistics has been able to control its operating costs effectively and improve its profitability over time.
Similarly, the pretax margin, a measure of profitability before accounting for taxes, showed fluctuations, reaching a peak of 9.59% in December 2022. However, it dropped to 3.32% by December 2023 before recovering to 5.83% in December 2024. This indicates some variations in the company's ability to generate profits before tax, potentially influenced by factors such as revenue fluctuations or changes in operating expenses.
The net profit margin, which represents the company's overall profitability after all expenses have been deducted, followed a non-linear pattern, peaking at 8.63% in December 2022. The margin then decreased to 2.44% in December 2023 before rebounding to 4.77% by December 2024. This fluctuation implies that XPO Logistics faced challenges in maintaining consistent profitability, possibly due to changes in costs or revenue streams.
In conclusion, while XPO Logistics Inc's profitability ratios have shown some volatility over the past five years, the overall trend indicates improvements in controlling costs and enhancing profitability, particularly in operating profit margin which experienced steady growth. Further analysis of the company's operational efficiency and revenue management could provide insights into sustaining and further enhancing its profitability in the future.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 8.56% | 5.85% | 6.01% | 3.58% | 0.60% |
| Return on assets (ROA) | 5.02% | 2.52% | 10.62% | 3.85% | 0.68% |
| Return on total capital | 13.40% | 9.24% | 25.11% | 12.00% | 4.58% |
| Return on equity (ROE) | 24.17% | 14.93% | 65.81% | 29.53% | 4.06% |
XPO Logistics Inc has shown a positive trend in profitability ratios over the past five years.
1. Operating return on assets (Operating ROA) has improved steadily from 0.60% in December 2020 to 8.56% in December 2024. This indicates that the company has been more efficient in generating operating profits relative to its assets over the period.
2. Return on assets (ROA) has also shown a positive trajectory, increasing from 0.68% in December 2020 to 5.02% in December 2024. This suggests that XPO Logistics has been more effective in generating profits from its total assets over time.
3. Return on total capital has exhibited a notable growth, starting at 4.58% in December 2020 and reaching 13.40% by December 2024. This indicates the company's ability to deliver returns to both equity and debt holders on the total invested capital.
4. Return on equity (ROE) has shown fluctuations but generally an upward trend, rising from 4.06% in December 2020 to 24.17% in December 2024. This signifies an improvement in the company's ability to generate returns for its shareholders relative to their equity investment.
Overall, XPO Logistics Inc has demonstrated progress in profitability ratios, reflecting increasing operational efficiency and effective utilization of its assets and capital to generate returns for its stakeholders.