Xylem Inc (XYL)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 37.51% | 36.90% | 37.74% | 38.02% | 37.53% |
| Operating profit margin | 11.78% | 8.85% | 11.26% | 11.26% | 7.53% |
| Pretax margin | 12.70% | 8.62% | 7.97% | 9.84% | 5.84% |
| Net profit margin | 10.39% | 8.27% | 6.43% | 8.22% | 5.21% |
Based on the provided data for Xylem Inc, we can analyze the profitability ratios over the five-year period from 2020 to 2024.
1. Gross Profit Margin:
- Xylem's gross profit margin fluctuated slightly over the period, ranging from 36.90% in 2023 to 38.02% in 2021. The margin was highest in 2021 and 2024, indicating the company's ability to maintain a strong profitability on its primary operations.
2. Operating Profit Margin:
- The operating profit margin showed more significant variability, with a low of 7.53% in 2020 and a high of 11.78% in 2024. This indicates Xylem's ability to control its operating expenses and generate profit from its core business activities, with a notable improvement in 2024.
3. Pre-tax Margin:
- Xylem's pre-tax margin also fluctuated over the period, with a low of 5.84% in 2020 and a peak of 12.70% in 2024. The increasing trend in the pre-tax margin suggests the company's improved ability to generate profit before accounting for taxes, with a significant improvement in profitability by 2024.
4. Net Profit Margin:
- The net profit margin, representing the company's bottom-line profitability, ranged from 5.21% in 2020 to 10.39% in 2024. The consistent increase in net profit margin indicates Xylem's efficient management of expenses and enhanced profitability over the years, culminating in a substantial improvement by 2024.
Overall, Xylem Inc demonstrated a positive trend in profitability ratios over the five-year period, with improvements in gross profit margin, operating profit margin, pre-tax margin, and net profit margin. These ratios reflect the company's effective cost management, revenue generation, and overall financial performance during the period analyzed.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.12% | 4.05% | 7.82% | 7.07% | 4.19% |
| Return on assets (ROA) | 5.40% | 3.78% | 4.46% | 5.16% | 2.90% |
| Return on total capital | 8.00% | 5.50% | 9.12% | 10.37% | 6.64% |
| Return on equity (ROE) | 8.36% | 5.99% | 10.16% | 13.27% | 8.56% |
Xylem Inc's profitability ratios show a mix of performance over the past five years.
Operating return on assets (Operating ROA) has exhibited fluctuation but generally increasing trend from 4.19% in 2020 to 7.82% in 2022 before slightly decreasing to 6.12% in 2024. This indicates that the company's operating income generated from its assets has been improving, reaching a peak in 2022.
Return on assets (ROA) also reflects a similar trend, increasing from 2.90% in 2020 to 5.40% in 2024, with some fluctuations in between. The improving ROA suggests that Xylem Inc has been effectively utilizing its assets to generate profits for the shareholders.
Return on total capital has shown a similar pattern, with an increase from 6.64% in 2020 to 8.00% in 2024. This ratio indicates how well the company is generating returns for both equity and debt holders.
Return on equity (ROE) has also demonstrated growth, rising from 8.56% in 2020 to 13.27% in 2021, before decreasing in the following years. The ROE reflects the company's ability to generate profits from the shareholders' equity, and the decreasing trend suggests that the company's profitability in relation to shareholder investments has declined in the later years.
Overall, Xylem Inc's profitability ratios show a positive trajectory in terms of operating efficiency and asset utilization, but there may be some areas for improvement in sustaining and enhancing returns to equity holders.