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
Old Dominion Freight Line Inc., 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 demonstrates a strong upward trajectory between 2018 and 2022, characterized by an acceleration in both margin expansion and capital efficiency starting in 2020. While the 2019 period showed a slight stagnation or minor decline across most metrics, the subsequent three years reflect a significant and consistent improvement in the ability to convert revenue into profit and assets into returns.
- Profit Margin Analysis
- The operating profit margin exhibited a growth trend, rising from 20.21% in 2018 to 29.40% by the end of 2022. This expansion suggests improved operational efficiency and better cost management relative to revenue growth. Similarly, the net profit margin increased from a stagnant 14.98% in 2018 and 2019 to 22.00% in 2022, indicating that the gains at the operating level successfully flowed through to the bottom line.
- Asset and Equity Returns
- Return on Assets (ROA) and Return on Equity (ROE) both show a marked acceleration after 2020. ROA increased from 17.08% in 2018 to 28.46% in 2022, signaling a higher productivity of the total asset base. ROE followed a similar path, moving from 22.60% in 2018 to 37.70% in 2022. The sharp increase in ROE during the 2021-2022 period suggests a substantial increase in shareholder value creation.
- Comparative Efficiency Trends
- A notable correlation is observed between the rise in operating margins and the surge in ROA and ROE. The synchronization of these increases indicates that the growth in profitability is driven by core operational improvements rather than one-time financial gains. The widening gap between the 2018 and 2022 figures across all four ratios confirms a systemic improvement in the company's overall financial performance.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Operating Profit Margin
Old Dominion Freight Line Inc., 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 thousands) | ||||||
| Operating income | 1,840,632) | 1,391,602) | 906,882) | 818,706) | 817,051) | |
| Revenue from operations | 6,260,077) | 5,256,328) | 4,015,129) | 4,109,111) | 4,043,695) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 29.40% | 26.47% | 22.59% | 19.92% | 20.21% | |
| 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 from operations
= 100 × 1,840,632 ÷ 6,260,077 = 29.40%
2 Click competitor name to see calculations.
The financial data reveals a period of significant expansion in operational efficiency and profitability between 2018 and 2022. While the initial two years showed relative stability, the subsequent period was marked by accelerated growth in both top-line revenue and bottom-line operating income, resulting in a substantial expansion of the operating profit margin.
- Revenue Growth Trends
- Revenue remained relatively flat between 2018 and 2020, fluctuating around the 4 billion USD mark. However, a sharp upward trajectory began in 2021, with revenue increasing to 5.26 billion USD, and continuing to 6.26 billion USD by the end of 2022. This represents a significant increase in scale over the final three years of the period.
- Operating Income Performance
- Operating income exhibited growth that outpaced revenue expansion. After remaining stagnant between 2018 and 2019, operating income grew from 906.88 million USD in 2020 to 1.84 billion USD in 2022. The disproportionate increase in income relative to revenue indicates strong operational leverage and effective cost management.
- Operating Profit Margin Analysis
- The operating profit margin demonstrated a consistent upward trend starting in 2020. After a slight dip to 19.92% in 2019, the margin climbed steadily to 22.59% in 2020, 26.47% in 2021, and reached a peak of 29.40% in 2022. This trajectory reflects an increasing ability to convert revenue into operating profit, suggesting improved pricing power or optimized operational efficiencies.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Net Profit Margin
Old Dominion Freight Line Inc., 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 thousands) | ||||||
| Net income | 1,377,159) | 1,034,375) | 672,682) | 615,518) | 605,668) | |
| Revenue from operations | 6,260,077) | 5,256,328) | 4,015,129) | 4,109,111) | 4,043,695) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 22.00% | 19.68% | 16.75% | 14.98% | 14.98% | |
| 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 income ÷ Revenue from operations
= 100 × 1,377,159 ÷ 6,260,077 = 22.00%
2 Click competitor name to see calculations.
Analysis of the financial performance from 2018 to 2022 reveals a consistent upward trajectory in both absolute earnings and operational efficiency. While revenue remained relatively stable during the initial period, a significant acceleration in growth occurred after 2020, coinciding with a marked expansion in net profit margins.
- Net Income Growth
- Net income exhibited continuous growth over the five-year period. After a period of modest increases between 2018 and 2020, earnings experienced a substantial surge, rising from US$ 672.68 million in 2020 to US$ 1.38 billion by 2022. This represents a significant acceleration in total profitability.
- Revenue Trends
- Operating revenue remained stable between 2018 and 2019, with a slight contraction observed in 2020 to US$ 4.02 billion. However, a strong expansion followed in the subsequent years, with revenue reaching US$ 6.26 billion by 2022, indicating a robust increase in scale.
- Net Profit Margin Expansion
- The net profit margin demonstrates a steady and positive trend, moving from 14.98% in 2018 and 2019 to 22.00% in 2022. The expansion is particularly notable from 2020 onwards, where the margin increased by 5.25 percentage points. This trend indicates that net income grew at a significantly faster rate than operating revenue, reflecting enhanced operational leverage and improved cost management.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Return on Equity (ROE)
Old Dominion Freight Line Inc., 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 thousands) | ||||||
| Net income | 1,377,159) | 1,034,375) | 672,682) | 615,518) | 605,668) | |
| Shareholders’ equity | 3,652,917) | 3,679,807) | 3,326,288) | 3,080,717) | 2,680,483) | |
| Profitability Ratio | ||||||
| ROE1 | 37.70% | 28.11% | 20.22% | 19.98% | 22.60% | |
| 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 income ÷ Shareholders’ equity
= 100 × 1,377,159 ÷ 3,652,917 = 37.70%
2 Click competitor name to see calculations.
The financial data indicates a substantial acceleration in capital efficiency and profitability between 2018 and 2022. While the initial three years of the period were characterized by relative stability in the return on equity, a significant upward trajectory emerged in 2021 and 2022, driven primarily by an exponential increase in net earnings.
- Net Income Performance
- Net income demonstrated consistent growth, increasing from US$ 605.7 million in 2018 to US$ 1.38 billion in 2022. A sharp acceleration is observed starting in 2021, where income grew by approximately 53.7% over the previous year, followed by a further increase of 33.3% in 2022.
- Shareholders' Equity Trends
- Equity grew steadily from US$ 2.68 billion in 2018 to a peak of US$ 3.68 billion in 2021. In 2022, the equity base remained nearly flat, exhibiting a marginal decrease to US$ 3.65 billion, which indicates a stabilization of the total invested capital.
- Return on Equity (ROE) Analysis
- The ROE fluctuated within a narrow range between 19.98% and 22.60% from 2018 to 2020. However, a pivotal shift occurred in 2021, with the ratio climbing to 28.11%, and further escalating to 37.70% by the end of 2022. This rapid expansion of ROE is a direct result of net income growth significantly outpacing the growth of shareholders' equity, particularly in the final two years of the analyzed period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Return on Assets (ROA)
Old Dominion Freight Line Inc., 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 thousands) | ||||||
| Net income | 1,377,159) | 1,034,375) | 672,682) | 615,518) | 605,668) | |
| Total assets | 4,838,610) | 4,821,544) | 4,369,410) | 3,995,568) | 3,545,283) | |
| Profitability Ratio | ||||||
| ROA1 | 28.46% | 21.45% | 15.40% | 15.41% | 17.08% | |
| 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 income ÷ Total assets
= 100 × 1,377,159 ÷ 4,838,610 = 28.46%
2 Click competitor name to see calculations.
The financial trajectory between 2018 and 2022 demonstrates a significant increase in asset productivity and overall profitability, characterized by a sharp acceleration in earnings relative to the asset base in the latter part of the period.
- Net Income Trends
- Net income exhibited consistent upward momentum, increasing from 605.67 million USD in 2018 to 1.377 billion USD by 2022. A notable surge is observed starting in 2021, where earnings grew by approximately 53% year-over-year, followed by another substantial increase of 33% in 2022.
- Asset Base Evolution
- Total assets grew steadily from 3.545 billion USD in 2018 to 4.821 billion USD in 2021. However, asset growth plateaued in 2022, with a marginal increase to 4.838 billion USD, suggesting that the company successfully scaled its operations without requiring proportional increases in capital investment.
- Return on Assets (ROA) Analysis
- The ROA experienced a slight decline and period of stabilization between 2018 and 2020, moving from 17.08% to 15.40%. This was followed by a dramatic expansion in 2021 and 2022, with the ratio climbing to 21.45% and peaking at 28.46%. This trend indicates a significant improvement in the efficiency with which assets are utilized to generate profit, as the growth in net income vastly outpaced the growth in total assets during the final two years of the period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?