Honeywell International Inc. (NASDAQ:HON)

Return on Assets (ROA)

The ROA demonstrated a moderately fluctuating pattern over the reported periods. Starting at 7.28% in the first quarter of 2021, it increased steadily to peak near 9.2% in the final quarter of 2023. Following this peak, ROA showed a gradual downward trend, declining to a low point of about 7.29% by the third quarter of 2025 before a slight uptick to 7.57%. This suggests a phase of improving asset efficiency and profitability until late 2023, followed by a modest decrease in asset performance in subsequent periods.

Financial Leverage

Financial leverage ratios displayed an overall upward trajectory across the timeline. From an initial ratio of 3.53, it remained relatively stable with minor fluctuations around the mid-threes until early 2023. A marked increase was noted from 3.88 in the last quarter of 2023 to a higher leverage level near 4.87 by mid-2025, with a slight dip to 4.82 toward the last available quarter. This indicates an increasing reliance on debt financing over time, which could imply higher financial risk or strategic leveraging to support operations or growth.

Return on Equity (ROE)

The ROE showed a strong upward trend throughout the period analyzed. Beginning at 25.71% in the first quarter of 2021, it generally increased with some minor fluctuations, reaching a notable high of 36.52% in the third quarter of 2025. The progression highlights improved shareholder profitability and effective use of equity capital. The rise in ROE corresponds with the increasing financial leverage, suggesting that higher debt levels may be amplifying returns on equity.

Net Profit Margin

The net profit margin demonstrated moderate fluctuations over the observed periods. Starting near 14.17%, it increased to a peak of approximately 16.11% in late 2021 before experiencing some volatility around the 14% to 15.5% range subsequently. The data shows a slight downward trend in the mid-to-late 2024 period, though it recovers closer to 15% by early 2025. Overall, profitability measured by net margin remained relatively stable with minor cyclical variations.

Asset Turnover

Asset turnover exhibited an initial gradual improvement, increasing from around 0.51 to 0.6 by early 2023, indicating enhanced efficiency in generating sales from assets. However, there is a notable decline starting mid-2023, descending gradually to 0.5 by the first quarter of 2025. This suggests a reduction in asset utilization efficiency in recent periods after a phase of improvement.

Financial Leverage

Financial leverage showed a rising trend over the time frame, starting near 3.53 and moving upward to peak near 4.87 by late 2025. This indicates an increased use of debt or liabilities relative to equity, reflecting a potential shift towards higher financial risk or strategy to amplify returns through leverage. The increase is particularly pronounced from 2023 onward.

Return on Equity (ROE)

ROE demonstrated a generally positive and upward trajectory, increasing from around 25.71% in early 2021 to a high of approximately 36.52% by the first quarter of 2025. There was an evident upward spike around late 2023, where ROE peaked sharply, coinciding with increased financial leverage. This suggests effective use of leverage in enhancing shareholder returns, although some slight fluctuations occurred in the middle of the series.

The financial data reflects notable trends across multiple performance indicators over the observed periods.

Tax Burden

The tax burden ratio remained relatively stable, fluctuating slightly between 0.76 and 0.82. A gradual increase is seen towards the end of the period, indicating a marginal rise in the proportion of earnings retained after tax.

Interest Burden

A steady decline in the interest burden ratio is evident, dropping from 0.94 to a low of 0.85-0.86 in the latter periods. This trend suggests improving earnings before interest expenses in relation to operating income, signifying better management of interest obligations.

EBIT Margin

The EBIT margin shows a general upward trend with minor fluctuations, starting around 19.1% and reaching above 21% in several quarters. The highest margins are recorded towards the latest quarters, indicating improved operating efficiency and profitability.

Asset Turnover

Asset turnover ratio indicates moderate variability, climbing from 0.51 to a peak near 0.6 around early 2023, followed by a consistent decline back to about 0.5 by late 2025. This denotes an initial increase in asset utilization efficiency, later tapering off possibly due to growing asset base or reduced sales.

Financial Leverage

The financial leverage ratio demonstrates an upward trend throughout the periods, rising from around 3.5 to nearly 4.8. This suggests increasing use of debt or other liabilities relative to equity, potentially amplifying returns but also increasing financial risk.

Return on Equity (ROE)

ROE exhibits a strong positive trajectory overall, improving from approximately 25.7% to above 36%, with some volatility. The growth in ROE corresponds with rising EBIT margins and financial leverage, indicating effective profitability management combined with amplified equity returns through leverage.

In summary, the data reveals enhanced profitability and operational efficiency, supported by an increase in financial leverage. While asset turnover showed some decline towards the end, the combined impact of improved margins and leverage contributed to a robust return on equity. The declining interest burden ratio adds to positive financial health signals, reflecting better control of finance costs. The tax burden remained steady, indicating consistent tax impacts on net earnings.

Net Profit Margin

The net profit margin exhibits moderate fluctuations over the observed periods. Initially, it shows a gradual increase from 14.17% in the first quarter of 2021, peaking at 16.11% by the end of 2021. However, in 2022, the margin declines somewhat, reaching a low of 14% in the fourth quarter. Subsequently, it experiences a recovery trend throughout 2023, surpassing 15% in several quarters, and stabilizes around the 15% mark in early 2024. The margin then slightly declines towards the end of 2024 and into 2025, fluctuating between 14.3% and 15.07%. This pattern suggests periods of both improved and reduced profitability with some stabilization in recent quarters.

Asset Turnover

The asset turnover ratio shows an upward trend during the initial two years, increasing from 0.51 in early 2021 to a peak of 0.60 in the first quarter of 2023. After this peak, there is a discernible decline in turnover throughout 2024, dropping to 0.51 by the end of the year and further to 0.5 by the third quarter of 2025. The early increase indicates improved efficiency in utilizing assets to generate revenue, while the later decline suggests a reduction in asset utilization efficiency over time.

Return on Assets (ROA)

ROA follows a trend somewhat parallel to net profit margin but with less pronounced volatility. It initially rises from 7.28% in Q1 2021 to a high of 9.2% in Q4 2023, indicating enhanced overall profitability relative to total assets. Post this peak, ROA declines steadily through 2024 and into 2025, reaching approximately 7.29% in Q2 2025. This decrease aligns with the observed decrease in asset turnover, implying both profitability and efficiency challenges in recent periods.

Tax Burden

The tax burden ratio remained relatively stable over the periods, fluctuating narrowly between 0.76 and 0.82. There is a slight upward trend in the most recent quarters, increasing from approximately 0.79 in early 2021 to 0.82 by the last quarter observed. This indicates a consistent proportion of pre-tax income retained after taxes, with a minor increase in tax-related costs toward the end.

Interest Burden

The interest burden ratio displays a gradual decline over time, starting near 0.94–0.95 in 2021 and decreasing steadily to approximately 0.85–0.86 by the later stages of the timeline. This suggests an increased interest expense impact over time, reducing the income available before taxes.

EBIT Margin

The EBIT margin exhibits moderate variation, generally hovering between 19% and 22%. After some initial growth from roughly 19.1% to about 21.8% in 2021, the margin experiences fluctuations, with periodic increases and decreases, but sustains a level mostly above 20% in most quarters from 2022 onwards. This reflects a generally strong operating profitability with some periods of margin compression and expansion.

Asset Turnover

The asset turnover ratio shows variability around a level of 0.50 to 0.60, with an increase during 2021 and early 2022, peaking near 0.60, followed by a gradual decline back toward 0.50 by the end of the series. This indicates an initially improving efficiency in asset utilization which then moderates, implying some decrease in how effectively the asset base is generating sales in later quarters.

Return on Assets (ROA)

The ROA trend follows a pattern of increase in the earlier periods, climbing from approximately 7.3% in early 2021 to peak close to 9.2% around late 2023. Following this peak, a decline ensues, bringing ROA back down to roughly 7.3% by the end of the observed period. This trajectory reveals a period of improving asset profitability succeeded by a phase of reduced efficiency in generating net income from assets.

The analysis of the financial ratios over the observed periods reveals several key trends in operational efficiency and profitability.

Tax Burden

The tax burden ratio exhibited relative stability throughout the periods, starting at 0.79 and maintaining values close to this level, with a slight increase toward the later periods reaching up to 0.82. This indicates a fairly consistent effective tax rate, with a mild upward trend suggesting a marginally higher tax expense relative to pre-tax earnings in the most recent quarters.

Interest Burden

The interest burden ratio demonstrates a gradual downward trend from 0.94 to 0.85 over the total time span. This declining ratio implies an increasing interest expense burden on earnings before tax, potentially indicating higher financial leverage or rising interest costs relative to operating income. The steady decrease suggests increasing pressure from financial costs over time.

EBIT Margin

The EBIT margin, representing operating profitability, showed an overall positive trend with some fluctuations. Beginning at 19.1%, it increased to a peak around 21.84%, then experienced some variability before stabilizing near 21% in recent periods. Although there are minor fluctuations, the margin reflects sustained operational profitability with a modest upward tendency in the latter quarters.

Net Profit Margin

The net profit margin followed a pattern largely consistent with EBIT margin, starting at 14.17% and rising to approximately 16.11% at its highest point. Subsequent periods experienced slight declines and recoveries, ultimately stabilizing near 15% in recent quarters. This stability indicates effective control of costs and expenses beyond operating income, maintaining profitability at the net income level despite variations in other burdens.

In summary, the company shows steady operational profitability with EBIT and net profit margins maintaining reasonable levels and exhibiting modest improvement over time. The increasing tax burden slightly offsets these gains, while the declining interest burden ratio points to rising financial costs that could impact future net income unless managed. Overall, profitability remains solid, although attention to financing costs may be warranted to sustain these margins.