American Airlines Group Inc. (NASDAQ:AAL)

Return on Assets (ROA)

The ROA exhibited a notable negative trend starting in early 2020. Prior to the pandemic impact, data points are unavailable for 2019, but from March 31, 2020, the ROA was positive at 2.81%, quickly declining into negative territory by June 30, 2020 at -1.26%. This negative trend deepened substantially in subsequent quarters, reaching a low of -14.33% by March 31, 2021. Over the following quarters in 2021 and 2022, ROA gradually improved but remained negative, moving from -11.5% to -2.41%. The recovery trend continued into 2023, with ROA turning positive by March 31, 2023 (0.2%) and strengthening to a peak of 3.92% by September 30, 2023, before declining slightly to 1.3% at year-end. This pattern reflects a significant impact on asset profitability during the pandemic period, followed by a steady recovery in 2023.

Financial Leverage

Only one datapoint is reported for financial leverage, showing a ratio of 382.34 in 2019. No subsequent data is provided, preventing analysis of trends or changes over time.

Return on Equity (ROE)

No data is available for return on equity, hence no analysis or trend observation can be offered.

The quarterly financial data reveals several notable trends in profitability, efficiency, and leverage metrics over the analyzed period.

Net Profit Margin

The net profit margin experienced significant volatility, particularly from early 2020 through 2021. Initial positive margins transitioned sharply into considerable losses starting in the first quarter of 2020, coinciding with a decline from 3.68% to negative margins as deep as -61.53% by mid-2021. A gradual recovery is evident from late 2021 onward, with margins improving steadily and returning to positive territory by the first quarter of 2023. Margins peaked at 4.98% in the third quarter of 2023 before slightly moderating to 1.56% by year-end, indicating ongoing recovery but also some recent deceleration.

Asset Turnover

Asset turnover performance shows a declining trend during 2020, reflecting decreased operational efficiency, falling from 0.76 in the first quarter of 2020 to a low of 0.19 in mid-2021. This decline aligns temporally with disruptions impacting asset utilization. Following this trough, a consistent and steady improvement is observed from late 2021 through 2023, with asset turnover rising to 0.84 by the final quarter of 2023, suggesting enhanced asset use efficiency in the company’s operations during the recovery phase.

Financial Leverage

Financial leverage data is mainly absent except for an anomalous and implausible value of 382.34 recorded once, which likely indicates a data reporting error or misclassification. Without consistent data points, no meaningful trend analysis can be performed on leverage.

Return on Equity (ROE)

No data is available for return on equity throughout the periods assessed, precluding any analysis in this regard.

Overall, the data depicts a period of financial distress impacting profitability and asset efficiency starting in early 2020, followed by a gradual restoration of operational performance and profit margins entering 2023. The absence of comprehensive leverage and ROE data limits a full assessment of the company’s financial risk and shareholder returns during the timeframe.

Tax Burden

The tax burden ratio demonstrates some variability with a value of 0.75 noted in March 2020, followed by more stable values around the range of 0.68 to 0.77 from March 2023 through December 2023. This suggests relatively consistent tax expenses relative to pre-tax income in recent periods.

Interest Burden

The interest burden ratio shows a significant negative spike to -4.35 in June 2020, indicating unusual or adverse interest costs during that quarter. Following this, the ratio fluctuates but remains positive in 2023, gradually increasing from 0.09 in March 2023 to 0.62 in September 2023 before declining slightly to 0.34 in December 2023. This pattern reflects improving control over interest expenses in recent periods, albeit with some volatility.

EBIT Margin

There is a marked decline observed in EBIT margin starting from early 2020, transitioning from a positive 7.32% in March 2020 to sharply negative figures reaching as low as -68.55% in March 2021. This indicates significant operating losses likely linked to external disruptions. Post-March 2021, there is a gradual but steady recovery in EBIT margin, turning positive again by March 2023 and climbing to 10.53% in September 2023 before a slight decline to 6.19% in December 2023, signaling a rebound in operational profitability.

Asset Turnover

Asset turnover ratio decreases notably between March 2020 and June 2021, dropping from 0.76 to a low of 0.19, reflecting reduced efficiency in using assets to generate revenue during this period. However, from September 2021 onward, there is a consistent upward trend, reaching 0.84 by December 2023, indicating improved asset utilization and operational recovery over time.

Financial Leverage

A singular high value of 382.34 is recorded for financial leverage prior to March 31, 2019, with no subsequent data to indicate changes. The magnitude suggests a very high degree of leverage at that time, but absence of more recent data prevents trend analysis.

Return on Equity (ROE)

ROE data is missing across all reported periods, preventing any analysis of equity return trends.

Net Profit Margin

The net profit margin demonstrates significant volatility over the examined periods. Starting with a positive margin of 3.68% prior to the COVID-19 impact, the margin declined sharply from the first quarter of 2020 with consecutive negative values reaching a low of -61.53% in the second quarter of 2021. A gradual improvement is observed thereafter, transitioning from heavy losses to marginal profitability by early 2023, where the margin turned positive and peaked at 4.98% in the third quarter of 2023 before contracting slightly again to 1.56% by the end of that year.

Asset Turnover

The asset turnover ratio indicates general recovery and operational efficiency trends. Initially stable around 0.75 in early 2020, the ratio declined to a trough of 0.19 in the second quarter of 2021, reflecting decreased asset utilization. From that point onward, asset turnover exhibited consistent improvement, rising steadily through each subsequent quarter to reach 0.84 by the final quarter of 2023, surpassing pre-pandemic levels and suggesting an enhanced capacity to generate revenue from assets.

Return on Assets (ROA)

The ROA trend aligns with patterns observed in profitability and asset utilization. Early 2020 figures showed a positive return of 2.81%, which deteriorated rapidly into negative territory, bottoming at -14.33% in the first quarter of 2021. Following this nadir, a recovery phase is evident, with ROA gradually improving with minor fluctuations. By the first quarter of 2023, ROA returned to positive territory at 0.2%, continuing to rise to a peak of 3.92% by the third quarter before a slight decrease towards the end of the year. This progression reflects a recovery in asset efficiency and profitability after the pandemic-induced losses.

Summary

Overall, the financial ratios reveal the severe impact of the COVID-19 pandemic on profitability and operational efficiency during 2020 and early 2021. The company experienced substantial declines in profit margins, asset turnover, and ROA, reflecting operational disruptions and diminished earnings. However, from mid-2021 onward, there is clear evidence of a recovery trajectory, with steady improvements in asset utilization and profitability metrics. The return to positive profitability and increasing asset turnover by late 2023 indicates a resurgence in operational performance and financial health, though the final quarter shows some moderation in these gains.

Tax Burden

The tax burden ratio shows some variation over the periods, with a reported value of 0.75 in March 2020. It declines slightly by March 2023 to 0.73, after experiencing fluctuations between 0.68 and 0.77 in the earlier part of 2023. Overall, the tax burden remains relatively stable without extreme volatility.

Interest Burden

The interest burden ratio exhibits considerable volatility. It sharply drops to -4.35 in June 2020, indicating significant interest expense or financial distress during that period. Thereafter, the ratio progressively improves, reaching 0.34 by December 2023. The improvement in interest burden suggests a recovery phase and better management of financial obligations over time.

EBIT Margin

The EBIT margin displays a sharp decline beginning in early 2020, with a peak margin of 7.32% in the first quarter of 2020 falling dramatically to -68.55% by June 2020. Subsequent quarters show a gradual recovery trend, reaching positive territory again by March 2023 at 6.19%. This trend reflects substantial operational challenges in the early pandemic period, followed by a recovery in profitability margins by the end of 2023.

Asset Turnover

Asset turnover shows a declining pattern from 0.76 in March 2020 to a low of 0.19 in June 2020, indicating less efficient use of assets during that period. However, a steady improvement is observed thereafter, recovering to 0.84 by December 2023. This suggests a progressive restoration of asset utilization and operational efficiency over the subsequent quarters.

Return on Assets (ROA)

ROA trends align with other profitability measures, experiencing negative returns starting in March 2020 through late 2022, with the lowest point at -14.33% in March 2021. From early 2023, ROA returns to positive numbers, achieving 1.3% by December 2023. The pattern indicates a period of material losses followed by a slow but steady return to asset profitability.

Tax Burden

The tax burden ratio shows limited data in the earlier periods but indicates stability in recent quarters. From March 31, 2023, to December 31, 2023, the tax burden has hovered between 0.68 and 0.77, demonstrating moderate consistency without significant volatility in the tax impact on pre-tax income.

Interest Burden

This ratio exhibits considerable fluctuation and distress during early 2020, with a notable low of -4.35 around June 30, 2020, indicative of a significant interest expense relative to earnings. However, starting from March 31, 2023, a progressive improvement is observed, moving from 0.09 to 0.62 by September 30, 2023, before a slight pullback to 0.34 at year-end. Overall, the trend suggests an improving capacity to cover interest expenses in recent periods.

EBIT Margin

Operating profitability underwent marked volatility over the observed periods. Initially, in March 31, 2020, the EBIT margin was positive at 7.32%, followed by a sharp decline through 2020 with negative margins reaching as low as -68.55% by June 30, 2020. This steep detriment aligns with adverse conditions impacting earnings before interest and taxes. A gradual recovery is noted throughout 2021 and 2022, with EBIT margins transitioning from deep negatives to slightly negative and eventually turning positive by March 31, 2023. The EBIT margin peaked at 10.53% on September 30, 2023, before dipping slightly to 6.19% at the end of 2023. The overall pattern reflects a significant financial strain during the pandemic period and a subsequent robust operational recovery.

Net Profit Margin

The net profit margin closely mirrors the EBIT margin's trajectory, experiencing a steep decline beginning in early 2020 from a modest positive level of 3.68% on March 31, 2020, down to a nadir of approximately -61.53% in June 30, 2020. This decline underscores substantial net losses during this phase. Following this period, the margin gradually improved, reaching small positive results by March 31, 2023 (0.26%) and continuing upward to a high of 4.98% on September 30, 2023 before decreasing to 1.56% at the end of the year. This trend indicates recovery in overall profitability after a period of pronounced net losses, albeit with some variability toward the close of the last period.