Profitability Analysis
Difficulty level: Basic
Profitability ratios measure the company's ability to generate profitable sales from its resources (assets).
Ratios (Summary)
Boeing Co., profitability ratios
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Return on Sales | ||||||
| Gross profit margin | 15.44% | 15.42% | 15.98% | 18.72% | 19.38% | |
| Operating profit margin | 8.23% | 7.58% | 7.72% | 8.50% | 7.73% | |
| Net profit margin | 6.00% | 5.29% | 4.77% | 5.85% | 5.14% | |
| Return on Investment | ||||||
| Return on equity (ROE) | 62.85% | 30.82% | 66.47% | 114.31% | 119.56% | |
| Return on assets (ROA) | 5.49% | 4.95% | 4.39% | 5.02% | 4.82% | |
Source: Based on data from Boeing Co. Annual Reports
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Boeing Co.'s gross profit margin deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Boeing Co.'s operating profit margin deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Boeing Co.'s net profit margin improved from 2012 to 2013 and from 2013 to 2014. |
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Boeing Co.'s ROE deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Boeing Co.'s ROA improved from 2012 to 2013 and from 2013 to 2014. |
Gross Profit Margin
Boeing Co., gross profit margin calculation
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Gross profit | 14,010 | 13,355 | 13,054 | 12,868 | 12,463 | |
| Revenues | 90,762 | 86,623 | 81,698 | 68,735 | 64,306 | |
| Ratio | ||||||
| Gross profit margin1 | 15.44% | 15.42% | 15.98% | 18.72% | 19.38% | |
Source: Based on data from Boeing Co. Annual Reports
2014 Calculations
1 Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 14,010 ÷ 90,762 = 15.44%
| Ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Boeing Co.'s gross profit margin deteriorated from 2012 to 2013 but then slightly improved from 2013 to 2014. |
Operating Profit Margin
Boeing Co., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Earnings from operations | 7,473 | 6,562 | 6,311 | 5,844 | 4,971 | |
| Revenues | 90,762 | 86,623 | 81,698 | 68,735 | 64,306 | |
| Ratio | ||||||
| Operating profit margin1 | 8.23% | 7.58% | 7.72% | 8.50% | 7.73% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors | ||||||
| United Technologies Corp. | 15.01% | 14.70% | 13.32% | 13.92% | 13.23% | |
| Operating Profit Margin, Sector | ||||||
| Aerospace | –% | 10.57% | 10.04% | 10.99% | 10.25% | |
| Operating Profit Margin, Industry | ||||||
| Industrials | –% | 11.89% | 10.68% | 11.73% | 12.03% | |
Source: Based on data from Boeing Co. Annual Reports
2014 Calculations
1 Operating profit margin = 100 × Earnings from operations ÷ Revenues
= 100 × 7,473 ÷ 90,762 = 8.23%
| Ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Boeing Co.'s operating profit margin deteriorated from 2012 to 2013 but then improved from 2013 to 2014 exceeding 2012 level. |
Net Profit Margin
Boeing Co., net profit margin calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Net earnings related to parent | 5,446 | 4,585 | 3,900 | 4,018 | 3,307 | |
| Revenues | 90,762 | 86,623 | 81,698 | 68,735 | 64,306 | |
| Ratio | ||||||
| Net profit margin1 | 6.00% | 5.29% | 4.77% | 5.85% | 5.14% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors | ||||||
| United Technologies Corp. | 9.55% | 9.14% | 8.89% | 8.56% | 8.05% | |
| Net Profit Margin, Sector | ||||||
| Aerospace | –% | 6.91% | 6.48% | 7.09% | 6.47% | |
| Net Profit Margin, Industry | ||||||
| Industrials | –% | 9.07% | 8.05% | 9.10% | 8.44% | |
Source: Based on data from Boeing Co. Annual Reports
2014 Calculations
1 Net profit margin = 100 × Net earnings related to parent ÷ Revenues
= 100 × 5,446 ÷ 90,762 = 6.00%
| Ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Boeing Co.'s net profit margin improved from 2012 to 2013 and from 2013 to 2014. |
Return on Equity (ROE)
Boeing Co., ROE calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Net earnings related to parent | 5,446 | 4,585 | 3,900 | 4,018 | 3,307 | |
| Shareholders’ equity | 8,665 | 14,875 | 5,867 | 3,515 | 2,766 | |
| Ratio | ||||||
| ROE1 | 62.85% | 30.82% | 66.47% | 114.31% | 119.56% | |
| Benchmarks | ||||||
| ROE, Competitors | ||||||
| United Technologies Corp. | 19.93% | 17.95% | 19.80% | 22.76% | 20.45% | |
| ROE, Sector | ||||||
| Aerospace | –% | 22.05% | 28.41% | 35.43% | 31.80% | |
| ROE, Industry | ||||||
| Industrials | –% | 17.55% | 17.94% | 20.59% | 17.78% | |
Source: Based on data from Boeing Co. Annual Reports
2014 Calculations
1 ROE = 100 × Net earnings related to parent ÷ Shareholders’ equity
= 100 × 5,446 ÷ 8,665 = 62.85%
| Ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders' equity. | Boeing Co.'s ROE deteriorated from 2012 to 2013 but then improved from 2013 to 2014 not reaching 2012 level. |
Return on Assets (ROA)
Boeing Co., ROA calculation, comparison to benchmarks
| Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | Dec 31, 2010 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (USD $ in millions) | ||||||
| Net earnings related to parent | 5,446 | 4,585 | 3,900 | 4,018 | 3,307 | |
| Total assets | 99,198 | 92,663 | 88,896 | 79,986 | 68,565 | |
| Ratio | ||||||
| ROA1 | 5.49% | 4.95% | 4.39% | 5.02% | 4.82% | |
| Benchmarks | ||||||
| ROA, Competitors | ||||||
| United Technologies Corp. | 6.81% | 6.31% | 5.74% | 8.10% | 7.48% | |
| ROA, Sector | ||||||
| Aerospace | –% | 5.62% | 5.06% | 6.36% | 6.04% | |
| ROA, Industry | ||||||
| Industrials | –% | 6.96% | 6.12% | 7.20% | 6.63% | |
Source: Based on data from Boeing Co. Annual Reports
2014 Calculations
1 ROA = 100 × Net earnings related to parent ÷ Total assets
= 100 × 5,446 ÷ 99,198 = 5.49%
| Ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Boeing Co.'s ROA improved from 2012 to 2013 and from 2013 to 2014. |