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.

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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.

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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.

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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.

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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.

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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.

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