Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Return on Sales
Return on Investment
CSX Corp., profitability ratios
Based on: 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), 10-K (reporting date: 2018-12-31).
The profitability profile from 2018 to 2022 is characterized by a period of general stability, a noticeable contraction in 2020, and a subsequent recovery. While margins peaked in 2021, the efficiency of capital and asset utilization reached a five-year high by the end of 2022.
- Operating and Net Profit Margins
- Operating profit margins demonstrated a steady upward trajectory from 39.75% in 2018 to a peak of 44.67% in 2021, before moderating to 40.55% in 2022. Net profit margins followed a similar pattern, reflecting a strong correlation between operational efficiency and bottom-line results. The net margin reached its highest point in 2021 at 30.19%, following a brief dip to 26.13% in 2020, indicating a robust capacity to convert revenue into profit despite temporary volatility.
- Return on Equity (ROE)
- Return on equity exhibited significant fluctuation, dropping from 28.11% in 2019 to a period low of 21.11% in 2020. However, a strong recovery followed, with ROE ascending to 28.03% in 2021 and reaching a peak of 33.02% in 2022. This upward trend in the final two years suggests an increasing effectiveness in generating profits from shareholders' equity.
- Return on Assets (ROA)
- Return on assets remained relatively stable between 2018 and 2019, before declining to 6.95% in 2020. A consistent recovery was observed thereafter, with ROA improving to 9.33% in 2021 and further climbing to 9.94% in 2022. The progression from 2020 to 2022 indicates an improved efficiency in utilizing the total asset base to drive earnings.
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Operating Profit Margin
CSX Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 6,023) | 5,594) | 4,362) | 4,965) | 4,869) | |
| Revenue | 14,853) | 12,522) | 10,583) | 11,937) | 12,250) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 40.55% | 44.67% | 41.22% | 41.59% | 39.75% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| FedEx Corp. | 6.68% | 6.98% | — | — | — | |
| Uber Technologies Inc. | -5.75% | -21.97% | — | — | — | |
| Union Pacific Corp. | 39.87% | 42.83% | — | — | — | |
| United Airlines Holdings Inc. | 5.20% | -4.15% | — | — | — | |
| United Parcel Service Inc. | 13.05% | 13.17% | — | — | — | |
| Operating Profit Margin, Sector | ||||||
| Transportation | 10.07% | 9.44% | — | — | — | |
| Operating Profit Margin, Industry | ||||||
| Industrials | 9.06% | 9.24% | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 6,023 ÷ 14,853 = 40.55%
2 Click competitor name to see calculations.
The operational performance from 2018 to 2022 reflects a period of volatility followed by substantial growth in scale, though efficiency peaked prior to the final reporting year.
- Revenue and Operating Income Trends
- A contraction in revenue is observed from 2018 through 2020, reaching a low of 10,583 million US dollars. This trend reversed sharply in 2021 and 2022, with revenue climbing to 14,853 million US dollars by the end of the period. Operating income followed a similar trajectory, dipping in 2020 to 4,362 million US dollars before ascending to a peak of 6,023 million US dollars in 2022.
- Operating Profit Margin Analysis
- The operating profit margin demonstrated an upward trend for the first four years, rising from 39.75% in 2018 to a maximum of 44.67% in 2021. This indicates a period of increasing operational efficiency and cost management relative to revenue growth. However, a reversal occurred in 2022, where the margin declined to 40.55%.
- Correlation Between Growth and Efficiency
- A divergence is noted in the 2022 fiscal year. Despite achieving the highest revenue and operating income in the five-year sequence, the operating profit margin decreased by approximately 4.12 percentage points from the previous year. This suggests that the costs associated with generating the increased revenue grew at a faster rate than the revenue itself during this period.
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Net Profit Margin
CSX Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 4,166) | 3,781) | 2,765) | 3,331) | 3,309) | |
| Revenue | 14,853) | 12,522) | 10,583) | 11,937) | 12,250) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 28.05% | 30.19% | 26.13% | 27.90% | 27.01% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| FedEx Corp. | 4.09% | 6.23% | — | — | — | |
| Uber Technologies Inc. | -28.68% | -2.84% | — | — | — | |
| Union Pacific Corp. | 28.13% | 29.92% | — | — | — | |
| United Airlines Holdings Inc. | 1.64% | -7.97% | — | — | — | |
| United Parcel Service Inc. | 11.51% | 13.25% | — | — | — | |
| Net Profit Margin, Sector | ||||||
| Transportation | 4.73% | 9.05% | — | — | — | |
| Net Profit Margin, Industry | ||||||
| Industrials | 5.04% | 5.85% | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net profit margin = 100 × Net earnings ÷ Revenue
= 100 × 4,166 ÷ 14,853 = 28.05%
2 Click competitor name to see calculations.
The financial performance from 2018 to 2022 is characterized by a period of moderate volatility followed by significant growth in absolute earnings and revenue. Net profit margins remained resilient throughout this period, fluctuating within a narrow range between 26.13% and 30.19%.
- Revenue and Net Earnings Trends
- A contraction in both revenue and net earnings was observed through 2020, with revenue falling to a period low of US$ 10,583 million and net earnings dropping to US$ 2,765 million. This downturn was followed by a strong recovery phase; by 2022, revenue reached a peak of US$ 14,853 million and net earnings climbed to US$ 4,166 million, representing a substantial increase from the 2020 lows.
- Net Profit Margin Analysis
- The net profit margin exhibited a fluctuating but generally stable trend. After a dip to 26.13% in 2020, profitability surged to a five-year peak of 30.19% in 2021. Although the margin normalized to 28.05% in 2022, this figure remains higher than the 2018 baseline of 27.01%. The decrease in margin in 2022, despite record-high revenue and earnings, indicates that expenses grew at a slightly faster rate than net income during that fiscal year.
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Return on Equity (ROE)
CSX Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 4,166) | 3,781) | 2,765) | 3,331) | 3,309) | |
| Shareholders’ equity, attributable to CSX | 12,615) | 13,490) | 13,101) | 11,848) | 12,563) | |
| Profitability Ratio | ||||||
| ROE1 | 33.02% | 28.03% | 21.11% | 28.11% | 26.34% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| FedEx Corp. | 15.34% | 21.64% | — | — | — | |
| Uber Technologies Inc. | -124.54% | -3.43% | — | — | — | |
| Union Pacific Corp. | 57.54% | 46.06% | — | — | — | |
| United Airlines Holdings Inc. | 10.69% | -39.05% | — | — | — | |
| United Parcel Service Inc. | 58.36% | 90.44% | — | — | — | |
| ROE, Sector | ||||||
| Transportation | 19.64% | 30.78% | — | — | — | |
| ROE, Industry | ||||||
| Industrials | 15.38% | 15.38% | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROE = 100 × Net earnings ÷ Shareholders’ equity, attributable to CSX
= 100 × 4,166 ÷ 12,615 = 33.02%
2 Click competitor name to see calculations.
The profitability profile of the organization between 2018 and 2022 is characterized by a general upward trajectory in return on equity, despite a notable contraction in 2020. Net earnings demonstrated volatility during the mid-period but ended the five-year span at their highest level, while shareholders' equity remained relatively stable, fluctuating within a narrow range.
- Net Earnings Trend
- Net earnings experienced a slight increase from 2018 to 2019, followed by a significant decline in 2020, where earnings dropped to 2,765 million US$. This downturn was followed by a strong recovery in 2021 and continued growth into 2022, reaching a peak of 4,166 million US$. This represents a cumulative increase in annual net income of approximately 26% from the 2018 baseline.
- Shareholders' Equity Dynamics
- Equity attributable to the company showed inconsistent movement. A decrease occurred in 2019, followed by two years of growth peaking at 13,490 million US$ in 2021. By the end of 2022, equity decreased to 12,615 million US$. The reduction in the equity base in 2022, occurring simultaneously with peak earnings, contributed to the acceleration of the return on equity.
- Return on Equity (ROE) Analysis
- The ROE exhibited a V-shaped recovery pattern. After rising to 28.11% in 2019, the ratio fell to its lowest point of 21.11% in 2020, correlating with the dip in net earnings. However, the ratio rebounded to 28.03% in 2021 and surged to 33.02% in 2022. The expansion of ROE in the final year indicates improved capital efficiency, as the company generated its highest net earnings with a reduced equity base compared to the previous year.
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Return on Assets (ROA)
CSX Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | 4,166) | 3,781) | 2,765) | 3,331) | 3,309) | |
| Total assets | 41,912) | 40,531) | 39,793) | 38,257) | 36,729) | |
| Profitability Ratio | ||||||
| ROA1 | 9.94% | 9.33% | 6.95% | 8.71% | 9.01% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| FedEx Corp. | 4.45% | 6.32% | — | — | — | |
| Uber Technologies Inc. | -28.47% | -1.28% | — | — | — | |
| Union Pacific Corp. | 10.69% | 10.27% | — | — | — | |
| United Airlines Holdings Inc. | 1.09% | -2.88% | — | — | — | |
| United Parcel Service Inc. | 16.24% | 18.57% | — | — | — | |
| ROA, Sector | ||||||
| Transportation | 4.34% | 6.88% | — | — | — | |
| ROA, Industry | ||||||
| Industrials | 3.31% | 3.40% | — | — | — | |
Based on: 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), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROA = 100 × Net earnings ÷ Total assets
= 100 × 4,166 ÷ 41,912 = 9.94%
2 Click competitor name to see calculations.
The financial performance from 2018 to 2022 is characterized by a period of volatility in earnings followed by a strong recovery, set against a backdrop of steady asset growth.
- Net Earnings Trend
- Net earnings experienced a period of instability, with a slight increase in 2019 followed by a significant contraction in 2020, where earnings dropped to US$ 2,765 million. This decline was succeeded by a robust recovery phase, with earnings rising to US$ 3,781 million in 2021 and reaching a peak of US$ 4,166 million by December 31, 2022.
- Asset Base Expansion
- Total assets demonstrated a consistent and linear upward trajectory throughout the five-year period. The asset base grew from US$ 36,729 million in 2018 to US$ 41,912 million in 2022, indicating a steady increase in the company's total resource investment.
- Return on Assets (ROA) Efficiency
- The ROA mirrored the fluctuations in net earnings, decreasing from 9.01% in 2018 to a low of 6.95% in 2020. This decline suggests a period of diminished asset productivity. However, a strong rebound occurred in the subsequent two years, with the ratio climbing to 9.33% in 2021 and concluding the period at 9.94% in 2022. This final increase indicates that earnings growth outpaced asset growth, resulting in improved operational efficiency and a higher rate of return on the invested asset base.
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