Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Common Stock Valuation Ratios
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Profitability Ratios (Summary)
Honeywell International Inc., profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 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).
The data reveals several notable trends in the financial performance over the five-year period ending in 2024.
- Gross Profit Margin
- The gross profit margin shows a consistent upward trend, increasing from 32.07% in 2020 to 38.09% in 2024. This gradual improvement suggests an enhanced ability to manage production costs relative to revenue, indicating greater efficiency or possibly favorable pricing strategies.
- Operating Profit Margin
- Operating profit margin also exhibits a positive trajectory, ascending from 17.45% in 2020 to 19.33% in 2024. The steady growth over the five years reflects effective control over operating expenses and contributes to strengthening overall profitability.
- Net Profit Margin
- The net profit margin varies during the period, rising from 14.64% in 2020 to a peak of 16.11% in 2021, followed by a decline to 14% in 2022. It recovers somewhat in 2023 to 15.43% before decreasing again to 14.82% in 2024. This fluctuation indicates varying impacts of non-operating factors such as taxes, interest, or extraordinary items on the bottom line.
- Return on Equity (ROE)
- The return on equity demonstrates strong performance, increasing from 27.23% in 2020 to a peak of 35.68% in 2023 before experiencing a decline to 30.64% in 2024. The elevated levels throughout suggest efficient utilization of shareholder equity to generate earnings, though the slight fall in the final year may warrant further examination.
- Return on Assets (ROA)
- Return on assets shows some variability, rising from 7.4% in 2020 to 9.2% in 2023, followed by a drop to 7.59% in 2024. This pattern indicates fluctuating effectiveness in asset utilization, with the peak year marked by optimal asset management and the recent decline suggesting potential challenges in maintaining asset productivity.
Overall, profitability margins generally strengthen over the period, with gross and operating margins steadily improving. However, net margin and returns show some volatility, highlighting areas that may be influenced by broader financial or market conditions. The data suggests an overall positive performance trend with occasional fluctuations that may need to be addressed.
Return on Sales
Return on Investment
Gross Profit Margin
Honeywell International Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals a consistent upward trend in both gross profit and net sales over the five-year period from 2020 to 2024. Gross profit increased steadily from 10,468 million USD in 2020 to 14,662 million USD by 2024, indicating a strong growth trajectory. Similarly, net sales rose from 32,637 million USD in 2020 to 38,498 million USD in 2024, reflecting gradual expansion in revenue generation.
Gross profit margin exhibits a positive progression throughout the analyzed period. Starting at 32.07% in 2020, the margin improved each year, reaching 38.09% in 2024. This upward motion suggests an enhancement in operational efficiency or pricing strategies, allowing the company to retain a higher proportion of sales revenue as gross profit.
- Gross Profit
- Shows continuous year-over-year growth, increasing by approximately 40% from 2020 to 2024.
- Net Sales
- Displays moderate but steady increases annually, signifying consistent revenue growth without considerable volatility.
- Gross Profit Margin
- Gradually improved each year, reflecting effective cost management or improved sales mix contributing to profitability enhancement.
Overall, the data points to a robust financial performance characterized by increasing sales volumes accompanied by improving profitability metrics. This combination suggests the company is managing its cost structure effectively while successfully expanding its market presence.
Operating Profit Margin
Honeywell International Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Operating Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals a consistent growth trend across key performance indicators over the five-year period ending December 31, 2024. Net sales have increased steadily each year, rising from $32,637 million in 2020 to $38,498 million in 2024. This demonstrates a solid expansion in revenue generation capacity.
Operating income has similarly exhibited an upward trajectory, growing from $5,696 million in 2020 to $7,441 million in 2024. This increase suggests effective cost management or improved operational efficiency alongside expanding sales volumes.
Operating profit margin has also shown a positive trend, rising from 17.45% in 2020 to 19.33% in 2024. This indicates that the company has been able to enhance its profitability relative to sales, maintaining and slightly improving its operating leverage over the years. The margin increment is gradual but consistent, particularly noticeable with a jump between 2022 and 2023.
Overall, the pattern suggests an improving operational performance with both top-line growth and margin expansion contributing to enhanced profitability. No negative or volatile fluctuations are evident, which points to stable financial health and effective strategic execution during the period.
- Net Sales
- Increased consistently from $32,637M (2020) to $38,498M (2024), indicating steady revenue growth.
- Operating Income
- Grew from $5,696M (2020) to $7,441M (2024), reflecting higher operational earnings.
- Operating Profit Margin
- Improved from 17.45% (2020) to 19.33% (2024), showing enhanced profitability efficiency.
Net Profit Margin
Honeywell International Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Honeywell | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Net Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Net profit margin = 100 × Net income attributable to Honeywell ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to Honeywell
- The net income shows a general upward trend over the five-year period. Starting at $4,779 million in 2020, it increased to $5,542 million in 2021, followed by a decrease to $4,966 million in 2022. Subsequently, net income rose again to $5,658 million in 2023 and slightly increased further to $5,705 million in 2024. This fluctuation indicates variability in profitability but an overall positive trajectory in net income levels.
- Net Sales
- Net sales exhibit a steady and consistent increase throughout the period. From $32,637 million in 2020, sales rose each year, reaching $38,498 million by 2024. This growth reflects expanding revenue streams or increased sales volumes, indicating positive business development and market demand over time.
- Net Profit Margin
- The net profit margin percentage fluctuates moderately over the years. Starting at 14.64% in 2020, it increased to 16.11% in 2021, then declined to 14.00% in 2022. Margins improved again to 15.43% in 2023 but slightly decreased to 14.82% in 2024. These variations suggest changing cost structures or pricing strategies affecting profitability efficiency, despite overall strong revenue and income growth.
- Summary
- The company has demonstrated consistent revenue growth from 2020 through 2024, which is complemented by an overall increase in net income despite some year-to-year fluctuations. The net profit margin trends suggest some volatility in operational efficiency or cost management. However, the profit margins have generally remained within a narrow band around 14% to 16%, reflecting stable profitability levels relative to sales.
Return on Equity (ROE)
Honeywell International Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Honeywell | ||||||
| Total Honeywell shareowners’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| ROE, Sector | ||||||
| Capital Goods | ||||||
| ROE, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
ROE = 100 × Net income attributable to Honeywell ÷ Total Honeywell shareowners’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several key trends in the performance and financial position over the analyzed periods.
- Net Income
- Net income attributable to Honeywell showed an overall upward trend with some fluctuations. It increased from 4,779 million US dollars in 2020 to 5,542 million in 2021, followed by a decline to 4,966 million in 2022. The figure then rebounded to 5,658 million in 2023 and marginally increased further to 5,705 million in 2024. This pattern suggests resilience and recovery in profitability after a temporary dip in 2022.
- Total Shareowners’ Equity
- The total equity of the shareholders exhibited a different trend, initially rising from 17,549 million US dollars in 2020 to 18,569 million in 2021. However, it then declined through 2022 and 2023, reaching a low of 15,856 million before recovering significantly to 18,619 million in 2024. This fluctuation may reflect changes in retained earnings, dividend policies, or equity transactions during these periods.
- Return on Equity (ROE)
- ROE presented relatively high values throughout, indicating efficient use of equity to generate profits. Starting at 27.23% in 2020, it increased to almost 30% in 2021 and 2022, surged to a peak of 35.68% in 2023, then declined to 30.64% in 2024. The peak in 2023 coincides with the lowest equity base, indicating higher profitability relative to equity, while the subsequent decrease in 2024 aligns with the recovery in equity levels.
In summary, the company demonstrated strong profitability with some volatility in net income and equity levels. The fluctuations in equity impacted ROE, which peaked when equity was at its lowest. Despite these movements, the firm maintained solid returns on its equity investment throughout the period analyzed.
Return on Assets (ROA)
Honeywell International Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Honeywell | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| ROA, Sector | ||||||
| Capital Goods | ||||||
| ROA, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
ROA = 100 × Net income attributable to Honeywell ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends and shifts over the five-year period ending December 31, 2024.
- Net Income Attributable to Honeywell (US$ in millions)
- The net income showed a general upward trend, increasing from $4,779 million in 2020 to $5,705 million in 2024. Notably, there was a peak in 2021 at $5,542 million, followed by a decline in 2022 to $4,966 million. However, the company rebounded with an increase to $5,658 million in 2023 and a slight further increase in 2024. This pattern may indicate some volatility in earnings but a generally positive growth trajectory over the long term.
- Total Assets (US$ in millions)
- Total assets exhibited a fluctuating trend with some contraction during the 2020-2023 period, declining from $64,586 million in 2020 to $61,525 million in 2023. However, in 2024, there was a significant increase to $75,196 million, representing a sizeable expansion in asset base. This recent growth could imply increased investments, acquisitions, or asset accretion.
- Return on Assets (ROA, %)
- The ROA percentage showed variability year-over-year. It rose from 7.4% in 2020 to 8.6% in 2021, followed by a decrease to 7.97% in 2022. There was a peak in 2023 at 9.2%, the highest in the period, suggesting that the company improved its effectiveness in generating income from its assets that year. However, this efficiency dropped to 7.59% in 2024 despite the growth in total assets, indicating that the increased asset base did not immediately translate into proportionate income gains.