American Airlines Group Inc. (NASDAQ:AAL)

The financial data reveals several key trends over the five-year period analyzed.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios exhibit a significant decline in 2020, falling from around 0.76-0.77 in 2019 to 0.28-0.30 in 2020. This sharp drop likely reflects impaired operational efficiency, possibly due to external disruptions during that year. In subsequent years, these ratios show a progressive recovery, reaching levels of 0.84 (reported) and 0.88 (adjusted) by 2023, slightly surpassing the 2019 initial levels. This suggests a return to improved utilization of assets in generating revenue.

Debt to Capital

Reported and adjusted debt to capital ratios start at around 1.00 and 1.02 in 2019, rising sharply to peaks of 1.27 and 1.33 in 2020. This increase indicates an elevated reliance on debt financing relative to total capital during that period. A gradual reduction follows through the next years, stabilizing around 1.19-1.25 by 2023. Although the ratios decreased from their 2020 highs, they remain higher than the pre-2020 levels, reflecting a sustained elevated financial leverage position.

Net Profit Margin

Reported and adjusted net profit margins experienced a severe contraction in 2020, with reported margin plunging from a positive 3.68% in 2019 to a negative 51.25%, and adjusted margin declining from 3.96% to -70.51%. This dramatic deterioration highlights major profitability challenges during that year. Margins improved notably in the following years, turning positive again by 2022 with adjusted margins reaching 3.16%, before moderating slightly to approximately 1.54%-1.56% in 2023. The trend indicates a partial recovery in profitability, although margins remain below the pre-2020 levels.

Return on Assets (ROA)

ROA similarly mirrors the downward trend seen in profitability metrics. Reported ROA declined from 2.81% in 2019 to -14.33% in 2020 and then showed gradual recovery to 1.30% in 2023. Adjusted ROA exhibited a more pronounced drop, reaching -20.8% in 2020, with a subsequent increase to 2.51% in 2022 and a slight dip to 1.35% in 2023. These figures indicate a significant erosion in asset-based profitability during the crisis year followed by partial restoration in subsequent years, yet remaining below the 2019 baseline.

Missing Data

Several key leverage and profitability metrics, including debt to equity, financial leverage, and return on equity, are not available. This absence limits the completeness of the leverage and returns assessment.

Overall, the data depict a sharp operational and financial impact around 2020, consistent with a major disruption scenario. The subsequent years demonstrate a recovery trend in asset efficiency and profitability, though leverage ratios remain elevated and profitability metrics have not fully returned to pre-2020 levels.

Operating Revenues

The operating revenues experienced a significant decline from 45,768 million US dollars in 2019 to 17,337 million in 2020, indicating a substantial contraction during that period. However, a recovery trend is evident starting in 2021 with revenues rising to 29,882 million and continuing to increase through 2022 and 2023, reaching 48,971 million and 52,788 million respectively. This pattern suggests a rebound and growth beyond pre-2020 levels.

Total Assets

Total assets showed a gradual increase from 59,995 million US dollars in 2019 to a peak of 66,467 million in 2021. Following this peak, there was a slight decline over the subsequent two periods, with total assets decreasing to 64,716 million in 2022 and further to 63,058 million in 2023, indicating some asset base contraction after the 2021 high.

Reported Total Asset Turnover

The reported total asset turnover ratio reflects operational efficiency in generating revenues from assets. There was a sharp decline from 0.76 in 2019 to 0.28 in 2020, correlating with the revenue drop. Post-2020, the ratio improved gradually, reaching 0.45 in 2021 and recovering to pre-2019 levels by 2022 with 0.76. The upward trend continued into 2023, increasing to 0.84, indicating improved utilization of assets to generate revenue.

Adjusted Total Assets

Adjusted total assets decreased slightly from 59,350 million in 2019 to 58,769 million in 2020, followed by growth to 62,911 million in 2021. Afterward, there was a decline similar to total assets, falling to 61,617 million in 2022 and 60,170 million in 2023. This adjusted figure mirrors the total assets trend but consistently remains slightly lower, reflecting certain adjustments made to asset valuation.

Adjusted Total Asset Turnover

The adjusted total asset turnover saw a decrease from 0.77 in 2019 to 0.30 in 2020, aligning with the impact of decreased revenues and increased economic pressures. A recovery followed with ratios of 0.47 in 2021 and 0.79 in 2022, surpassing pre-2020 levels. The ratio further improved to 0.88 in 2023, demonstrating enhanced effectiveness in asset use after adjustments.

Total Debt

The total debt increased significantly from 24,315 million USD at the end of 2019 to a peak of 38,060 million USD in 2021. Subsequently, it decreased to 35,663 million USD in 2022 and further declined to 32,902 million USD by the end of 2023. This indicates a period of aggressive borrowing followed by a gradual reduction in total debt over the last two years.

Stockholders’ Deficit

The stockholders’ deficit worsened substantially in 2020, increasing from a relatively minor deficit of -118 million USD in 2019 to -6,867 million USD. The deficit deepened slightly in 2021, reaching -7,340 million USD, but then improved in 2022 and 2023 to -5,799 million USD and -5,202 million USD respectively. This pattern suggests financial strain during the earlier years followed by some recovery in equity positions in more recent periods.

Adjusted Total Debt

Adjusted total debt mirrored the trend seen in total debt, rising from 33,444 million USD in 2019 to a peak of 46,177 million USD in 2021. Thereafter, it declined to 43,687 million USD in 2022 and 40,663 million USD in 2023. This adjustment likely accounts for off-balance-sheet liabilities or other debt-like obligations, but shows a consistent pattern of increase followed by reduction.

Adjusted Stockholders’ Deficit

Adjusted stockholders’ deficit showed a similar trajectory to the unadjusted deficit, with an increase from -734 million USD in 2019 to a peak negative value of -10,887 million USD in 2021. It then improved to -8,888 million USD in 2022 and further improved to -8,081 million USD in 2023, indicating a partial recovery in net equity after a period of significant erosion.

Overall Insights

The data reflects a challenging financial period beginning in 2020, possibly due to extraordinary circumstances affecting the company's capital structure and equity position. Both debt measures increased considerably through 2021, while stockholders' deficit deepened, signifying financial stress. However, the years 2022 and 2023 show signs of stabilization with decreasing debt levels and improving equity deficits, suggesting efforts toward financial recovery and deleveraging.

Total Debt

The total debt increased significantly from 24,315 million USD in 2019 to a peak of 38,060 million USD in 2021. After 2021, it decreased gradually to 32,902 million USD by the end of 2023, indicating a partial deleveraging process.

Total Capital

Total capital showed a general upward trend from 24,197 million USD in 2019 to 30,720 million USD in 2021. However, it declined somewhat afterward, reaching 27,700 million USD by 2023, reflecting a contraction in the capital base.

Reported Debt to Capital Ratio

The reported debt to capital ratio rose sharply from 1.00 in 2019 to 1.27 in 2020, showing increased leverage. It then decreased marginally over the following years, stabilizing at 1.19 in both 2022 and 2023, suggesting moderate leverage reduction but sustained high indebtedness relative to capital.

Adjusted Total Debt

Adjusted total debt followed a similar pattern as the reported debt but at higher absolute levels, increasing from 33,444 million USD in 2019 to 46,177 million USD in 2021. It then declined to 40,663 million USD by 2023, indicating a decline in adjusted liabilities but remaining elevated compared to 2019.

Adjusted Total Capital

Adjusted total capital rose from 32,710 million USD in 2019 to 35,290 million USD in 2021, then declined steadily to 32,582 million USD by 2023, mirroring the pattern seen in total capital, with a slight contraction in recent years.

Adjusted Debt to Capital Ratio

This ratio escalated from 1.02 in 2019 to 1.33 in 2020, indicating increased leverage after adjustments. Although it decreased to 1.25 by 2023, the ratio remained considerably above 1, which suggests that the adjusted debt exceeds adjusted capital, pointing to a leveraged financial structure that is slowly improving but still elevated.

The financial data reveals evolving trends in asset levels and equity positions over the five-year span examined.

Total Assets

Total assets displayed a gradual increase from 59,995 million US dollars at the end of 2019 to a peak of 66,467 million US dollars by the end of 2021. Subsequently, total assets decreased each year, reaching 63,058 million US dollars by the end of 2023. This pattern suggests an expansion phase followed by a moderate contraction in asset holdings over the period.

Stockholders’ Deficit

The stockholders’ deficit deepened substantially from a relatively modest negative balance of 118 million US dollars at the end of 2019 to increasingly larger deficits each year through 2021, reaching -7,340 million US dollars. Notably, from 2022 onwards, the deficit began to improve, closing at -5,202 million US dollars by the end of 2023. This indicates initial worsening of equity position followed by partial recovery in recent years.

Adjusted Total Assets

Adjusted total assets followed a similar but less pronounced pattern compared to total assets. The values increased initially from 59,350 million US dollars in 2019 to 62,911 million US dollars in 2021, then declined gradually through 2023 to 60,170 million US dollars. The adjusted figures are consistently lower than the reported total assets, indicating conservative asset adjustments are applied.

Adjusted Stockholders’ Deficit

The adjusted stockholders’ deficit showed a meaningful deterioration from -734 million US dollars in 2019 to -10,887 million US dollars in 2021, which was more severe than the reported deficit. A trend toward improvement followed, with the deficit narrowing to -8,081 million US dollars by 2023, suggesting some recovering equity conditions when considering adjustments.

Financial Leverage Metrics

Both reported and adjusted financial leverage ratios are not provided, which limits the analysis of leverage trends. However, given the changes in deficits and total assets, it can be inferred that leverage levels might have increased initially and then stabilized or improved in the latter years.

In summary, the data reflects a period of asset growth and equity deterioration through 2021, followed by a moderate contraction in assets alongside an improving but still negative equity position through 2023. The gap between reported and adjusted figures suggests significant accounting adjustments impact the assessment of financial health.

Over the examined five-year period, the financial performance displays notable fluctuations, particularly influenced by external and internal factors affecting the operational environment.

Net Income (Loss)

The net income exhibited significant volatility, peaking in 2019 at 1,686 million US dollars, followed by a sharp decline to a substantial loss of 8,885 million US dollars in 2020. This was likely a result of extraordinary circumstances severely impacting profitability. Although losses persisted in 2021 at 1,993 million US dollars, the company returned to profitability by 2022, recording a modest net income of 127 million US dollars, which further improved to 822 million US dollars in 2023.

Operating Revenues

Operating revenues trended downward sharply from 45,768 million US dollars in 2019 to 17,337 million US dollars in 2020, reflecting a drastic reduction in business volume or demand. A gradual recovery is evident in the following years, with revenues increasing to 29,882 million US dollars in 2021, then rising sharply to 48,971 million US dollars in 2022, and further to 52,788 million US dollars in 2023, surpassing pre-2020 levels.

Reported Net Profit Margin

The reported net profit margin mirrored the income trend, starting at a healthy 3.68% in 2019 before plunging to a negative 51.25% in 2020. There was a partial recovery by 2021, though still negative at -6.67%. By 2022, the margin turned positive but remained thin at 0.26%, improving further to 1.56% in 2023, indicating a gradual restoration of profitability ratios.

Adjusted Net Income (Loss)

Adjusted net income followed a similar pattern to reported net income but indicates a higher loss in 2020 (-12,225 million US dollars) compared to the reported figure. The losses continued in 2021 but to a lesser extent (-1,387 million US dollars). There was a significant rebound in 2022 to a positive 1,549 million US dollars, suggesting adjustments made for exceptional items or one-time costs that paint a slightly improved financial health compared to reported figures. However, adjusted income declined to 812 million US dollars in 2023.

Adjusted Net Profit Margin

The adjusted net profit margin demonstrates extreme negative impact in 2020 at -70.51%, further reinforcing the severity of that fiscal year. In subsequent years, the margin improves substantially to -4.64% in 2021, and turns positive in 2022 at 3.16%. However, it retreats slightly to 1.54% in 2023, indicating some challenges in maintaining the improved profit levels achieved after the recovery phase.

Overall, the data reveal a significant disruption in 2020 with deep losses and revenue contraction, followed by a progressive recovery phase culminating in restored operating revenues and return to profitability by 2022 and 2023. Despite improvements, profit margins remain relatively thin, suggesting cautious optimism as operational stability is regained but with continued sensitivity to external pressures or cost structure constraints.

Net Income (Loss)

The net income exhibited a significant decline from a positive $1686 million in 2019 to a substantial loss of $8885 million in 2020, reflecting a major downturn. Although losses persisted in 2021 at $1993 million, the company returned to a marginal profit of $127 million in 2022, followed by a more pronounced recovery to $822 million in 2023. This indicates a gradual financial stabilization and recovery post-2020.

Stockholders’ Deficit

The stockholders’ deficit increased sharply from a relatively minor deficit of $118 million in 2019 to a severe deficit of $6867 million in 2020. The deficit worsened slightly to $7340 million in 2021, before improving to $5799 million in 2022 and further to $5202 million in 2023. This trend suggests a deterioration in equity during the initial period, followed by a partial recovery in the later years.

Adjusted Net Income (Loss)

Adjusted net income followed a similar trajectory to the reported net income but with larger fluctuations. Starting at $1811 million in 2019, it declined dramatically to a loss of $12225 million in 2020 and continued in loss by $1387 million in 2021. The adjusted figures show a marked improvement with positive adjusted net income of $1549 million in 2022, decreasing slightly to $812 million in 2023, indicating adjustments reveal greater volatility but overall a recovery trend aligned with reported figures.

Adjusted Stockholders’ Deficit

The adjusted stockholders’ deficit showed increased magnitude compared to reported deficits, escalating from $734 million in 2019 to $10097 million in 2020, and further to $10887 million in 2021. Like the reported deficits, the adjusted deficit improved in 2022 and 2023, declining to $8888 million and $8081 million respectively, signaling ongoing efforts to strengthen the company’s equity position though adjusted metrics suggest a deeper initial impact and gradual recovery.

Reported and Adjusted Return on Equity (ROE)

Data on reported and adjusted ROE were not provided, preventing analysis of profitability relative to equity. However, given the trends in net income and stockholders’ deficit, profitability likely experienced significant fluctuations corresponding to income losses and subsequent recovery phases.

Net Income (Loss) Trend

The net income exhibited significant volatility over the period. It started positively at $1,686 million in 2019 but plunged to a substantial loss of $8,885 million in 2020, reflecting a sharp downturn. The losses narrowed in 2021 to $1,993 million, followed by a recovery to a modest profit of $127 million in 2022 and a further improvement to $822 million in 2023.

Total Assets Trend

Total assets showed a generally stable pattern with slight fluctuations. Assets increased from $59,995 million in 2019 to $66,467 million in 2021, then gradually decreased over the next two years, settling at $63,058 million in 2023. This indicates a contraction after initial growth.

Reported Return on Assets (ROA)

The reported ROA mirrored net income trends, starting at a positive 2.81% in 2019. It declined drastically to -14.33% in 2020, indicating significant inefficiency or losses relative to asset base. The ROA improved to -3.0% in 2021, then moved to a slight positive of 0.2% in 2022 and reached 1.3% in 2023, suggesting a gradual recovery in asset profitability.

Adjusted Net Income (Loss)

The adjusted net income followed a similar but more pronounced pattern. Starting at $1,811 million in 2019, it deteriorated significantly to a loss of $12,225 million in 2020, the largest loss in the series. The loss was reduced to $1,387 million in 2021, followed by a strong turnaround with adjusted profits of $1,549 million in 2022, before decreasing again to $812 million in 2023. This indicates notable adjustments impacting profitability assessment.

Adjusted Total Assets

Adjusted total assets showed a less dynamic range than net income but mirrored the overall asset trends. After starting at $59,350 million in 2019, assets declined to $58,769 million in 2020, increased to $62,911 million in 2021, then decreased steadily to $60,170 million by 2023.

Adjusted Return on Assets (Adjusted ROA)

Adjusted ROA displayed greater volatility compared to reported ROA. Beginning at 3.05% in 2019, it plunged to -20.8% in 2020, reflecting severe adjustment-related losses relative to assets. The metric improved substantially to -2.2% in 2021, then rose to a positive 2.51% in 2022, before receding to 1.35% in 2023. The elevated negative return in 2020 underscores significant extraordinary impacts during that period.

Overall Insights

The financial data reflect a significant disruption in 2020, with major losses and negative returns, likely due to extraordinary circumstances impacting operations. The recovery began in 2021 with narrowing losses and improving asset efficiency, culminating in positive net income and ROA by 2022 and 2023, albeit not yet reaching pre-2020 levels. Adjusted figures reveal even more pronounced impacts and recovery dynamics, suggesting substantial one-time or non-recurring items influencing results. Asset levels remained relatively stable, with minor fluctuations, indicating that changes in profitability were more influenced by operational performance than changes in the asset base.