Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2013
- Price to Operating Profit (P/OP) since 2013
- Aggregate Accruals
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Profitability Ratios (Summary)
American Airlines Group Inc., profitability ratios
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Return on Sales | ||||||
| Operating profit margin | ||||||
| Net profit margin | ||||||
| Return on Investment | ||||||
| Return on equity (ROE) | ||||||
| Return on assets (ROA) | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Operating Profit Margin
- The operating profit margin experienced a significant decline from 6.7% in 2019 to -60.11% in 2020, indicating a severe downturn in operational profitability. In 2021, the margin improved but remained negative at -3.54%, before turning positive again in 2022 at 3.28%. The upward trend continued into 2023, reaching 5.75%, which suggests a recovery toward pre-2019 profitability levels.
- Net Profit Margin
- The net profit margin followed a similar trajectory, dropping sharply from 3.68% in 2019 to -51.25% in 2020. This was followed by a marginal improvement to -6.67% in 2021, remaining in loss territory. The margin then edged into positive territory at 0.26% in 2022 and further increased to 1.56% in 2023. Despite recovery signs, the net profitability has yet to reach the 2019 level.
- Return on Assets (ROA)
- ROA declined from 2.81% in 2019 to -14.33% in 2020, reflecting a significant decrease in asset efficiency likely linked to losses. The negative trend continued in 2021 but showed improvement, moving to -3%. The ratio turned slightly positive at 0.2% in 2022 and further increased to 1.3% in 2023, indicating progressive improvement in asset utilization.
- Return on Equity (ROE)
- No data is available for return on equity for the periods reviewed, limiting assessment of shareholder return trends.
Return on Sales
Return on Investment
Operating Profit Margin
American Airlines Group Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Transportation | ||||||
| Operating Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Operating income (loss) ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Income (Loss)
- The operating income displayed significant volatility over the five-year period. In 2019, the operating income was positive at 3,065 million USD. However, the year 2020 saw a substantial decline resulting in a large operating loss of 10,421 million USD, likely indicating severe operational challenges. This loss continued into 2021 but was markedly reduced to a loss of 1,059 million USD, signaling some level of recovery. The years 2022 and 2023 presented a return to profitability with operating incomes of 1,607 million USD and 3,034 million USD, respectively, suggesting a restoration of operational efficiency and financial stability.
- Operating Revenues
- Revenue trends reveal a sharp decrease starting in 2020, dropping from 45,768 million USD in 2019 to 17,337 million USD in 2020. This represents an approximate 62% decline, indicating a major disruption in revenue generation. Following this, revenues progressively improved in 2021 and 2022, reaching 29,882 million USD and 48,971 million USD, respectively. By 2023, operating revenues exceeded pre-2020 levels, reaching 52,788 million USD, suggesting a strong recovery and growth beyond the initial baseline.
- Operating Profit Margin
- The operating profit margin closely mirrors the trends observed in operating income and revenues. In 2019, the margin was positive at 6.7%. A drastic drop occurred in 2020 with a negative margin of -60.11%, indicating that the company was operating at a significant loss relative to its revenue. The margin improved to -3.54% in 2021 but remained negative, signaling the company had yet to stabilize fully. In 2022 and 2023, the margin turned positive again, reaching 3.28% and 5.75%, respectively, reflecting a gradual recovery and improving profitability ratios consistent with the increasing operating income and revenues.
Net Profit Margin
American Airlines Group Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Transportation | ||||||
| Net Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net income (loss) ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss)
- The net income exhibited significant volatility over the analyzed period. In 2019, the company reported a positive net income of $1,686 million. However, this figure sharply declined to a substantial loss of $8,885 million in 2020, reflecting severe financial challenges. In 2021, the loss narrowed but remained negative at $1,993 million. The company returned to profitability in 2022 with a modest income of $127 million, which further improved to $822 million in 2023, indicating a recovery trend.
- Operating Revenues
- Operating revenues also experienced considerable fluctuations. Starting at $45,768 million in 2019, revenues drastically decreased to $17,337 million in 2020, likely due to adverse market conditions. Subsequent years saw revenue recovery with $29,882 million in 2021, increasing sharply to $48,971 million in 2022, surpassing the pre-pandemic level. In 2023, revenues continued to grow, reaching $52,788 million, indicating a positive upward trend.
- Net Profit Margin
- The net profit margin mirrored the net income trend with significant deterioration in 2020, dropping from 3.68% in 2019 to -51.25%. This was followed by an improvement to -6.67% in 2021. The margin turned slightly positive in 2022 at 0.26% and further improved to 1.56% in 2023, suggesting gradual profitability restoration but still below pre-2019 levels.
Return on Equity (ROE)
American Airlines Group Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) | ||||||
| Stockholders’ deficit | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| ROE, Sector | ||||||
| Transportation | ||||||
| ROE, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net income (loss) ÷ Stockholders’ deficit
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss)
- The net income demonstrates significant volatility across the reported periods. In 2019, the company realized a substantial profit of $1,686 million. However, this was followed by a sharp decline in 2020, resulting in a large loss of $8,885 million, which likely reflects extraordinary challenges during that year. In 2021, the loss narrowed to $1,993 million, showing some recovery, though the company remained unprofitable. By 2022, profitability returned, but marginally, with net income of $127 million. The upward trend continued in 2023, with net income increasing to $822 million, though it had not yet reached the pre-2020 levels.
- Stockholders’ Deficit
- The stockholders’ deficit position worsened markedly during the period under review. It started with a small deficit of $118 million at the end of 2019. This deficit expanded drastically in 2020 to $6,867 million and further to $7,340 million in 2021, indicating sustained financial strain. Subsequent years showed some improvement, with the deficit reducing to $5,799 million at the end of 2022, and further narrowing to $5,202 million in 2023. Despite these improvements, the company remained in a deficit position throughout the period.
- Overall Insights
- The financial trajectory indicates a severe downturn starting in 2020, likely driven by external adverse events impacting operations and profitability. While operational recovery is evident with positive net income in the last two years, the magnitude of prior losses has resulted in a significant cumulative deficit in equity. The consistent, although improving, stockholders’ deficit highlights capital structure challenges. The available data do not include return on equity (ROE), which could have provided additional insights into shareholder value generation.
Return on Assets (ROA)
American Airlines Group Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| ROA, Sector | ||||||
| Transportation | ||||||
| ROA, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net income (loss) ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income (Loss)
- The net income exhibited considerable volatility over the analyzed period. In 2019, the company reported a strong profit of 1,686 million USD. However, this was followed by a significant loss of 8,885 million USD in 2020, reflecting severe financial challenges likely related to extraordinary external conditions. The loss persisted into 2021, though to a lesser extent, with a net loss of 1,993 million USD. By 2022, the company returned to a marginal positive net income of 127 million USD, signaling a recovery trend. This improvement continued into 2023, where net income increased to 822 million USD, indicating a strengthening financial position.
- Total Assets
- Total assets showed a gradual increase from 59,995 million USD at the end of 2019 to a peak of 66,467 million USD in 2021. Slight decreases were observed thereafter, with assets declining to 64,716 million USD in 2022 and further to 63,058 million USD in 2023. Overall, the asset base remained relatively stable with minor fluctuations, suggesting controlled investment or asset management during the period.
- Return on Assets (ROA)
- ROA followed a pattern consistent with net income trends. In 2019, ROA was positive at 2.81%, reflecting efficient asset utilization. The metric turned sharply negative in 2020, dropping to -14.33%, mirroring the substantial losses incurred. A partial improvement was noted in 2021 with ROA improving to -3.0%, though still negative. In 2022, ROA returned to a positive range at 0.2%, indicating marginal profitability relative to assets, and further improved to 1.3% in 2023. This gradual recovery suggests enhanced asset profitability over time, aligning with the company's profit rebound.