Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Income Statement
- Statement of Comprehensive Income
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Present Value of Free Cash Flow to Equity (FCFE)
- Return on Equity (ROE) since 2020
- Return on Assets (ROA) since 2020
- Debt to Equity since 2020
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Profitability Ratios (Summary)
Carrier Global Corp., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
The financial performance over the analyzed periods reveals several notable trends across key profitability and efficiency metrics.
- Gross Profit Margin
- The gross profit margin demonstrates a gradual declining trend from March 2021 through March 2023, decreasing from approximately 29.46% to 26.37%. This steady contraction suggests an increase in the cost of goods sold relative to revenue or pricing pressures affecting gross profitability.
- Operating Profit Margin
- The operating profit margin exhibits more variability. It initially remains relatively stable around the 18% mark during the first half of 2021 but experiences a notable dip to 12.83% by the end of 2021. Subsequently, it recovers strongly in 2022, peaking at 22.23% in September, before decreasing again to 15.84% in March 2023. This pattern indicates fluctuations in operating efficiency and expense management, possibly due to varying operating costs or changes in operational scale.
- Net Profit Margin
- Net profit margin follows a pattern broadly similar to the operating margin but with somewhat less pronounced swings. It decreases from 12.43% in March 2021 to a low of 8.07% by December 2021, then increases sharply to 17.55% in September 2022, before dropping again to 12.02% in March 2023. This trend reflects the impact of both operating results and non-operating items such as taxes, interest, or extraordinary gains/losses on the bottom-line profitability.
- Return on Equity (ROE)
- ROE shows significant fluctuation over the periods, starting at a high level of 34.98% in March 2021, dropping to 24.59% at the end of 2021, then surging to a peak of 50.17% in September 2022. It declines thereafter to 31.08% by March 2023. These variations imply changing levels of net income relative to shareholders' equity, potentially influenced by earnings volatility, leverage changes, or shifts in equity base.
- Return on Assets (ROA)
- ROA trends mirror those of ROE but at lower absolute percentages, indicating the efficiency of asset utilization in generating profits. ROA decreases from 9.13% in March 2021 to 6.36% by December 2021, improves steadily throughout 2022 reaching 14.15%, and falls again to 9.57% in the first quarter of 2023. This suggests periods of improved asset productivity followed by a recent contraction.
Overall, the data reveals a period of stress or operational challenges in late 2021, followed by a strong recovery phase during much of 2022, before profitability metrics and returns experienced a partial decline in early 2023. The declining gross margin trend warrants attention as it may affect sustained profitability unless managed through cost control or pricing strategies. The volatility in profit margins and returns suggests sensitivity to external or internal factors affecting costs, revenues, and capital efficiency during this period.
Return on Sales
Return on Investment
Gross Profit Margin
Carrier Global Corp., gross profit margin calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Gross margin | |||||||||||||
| Net sales | |||||||||||||
| Profitability Ratio | |||||||||||||
| Gross profit margin1 | |||||||||||||
| Benchmarks | |||||||||||||
| Gross Profit Margin, Competitors2 | |||||||||||||
| Boeing Co. | |||||||||||||
| Caterpillar Inc. | |||||||||||||
| Eaton Corp. plc | |||||||||||||
| GE Aerospace | |||||||||||||
| Honeywell International Inc. | |||||||||||||
| Lockheed Martin Corp. | |||||||||||||
| RTX Corp. | |||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q1 2023 Calculation
Gross profit margin = 100
× (Gross marginQ1 2023
+ Gross marginQ4 2022
+ Gross marginQ3 2022
+ Gross marginQ2 2022)
÷ (Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022
+ Net salesQ2 2022)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data over the analyzed periods reveals a fluctuating pattern in both net sales and gross margin, accompanied by a gradual decline in the gross profit margin percentage.
- Net Sales
- Net sales show variability across the quarters, with a peak observed in the third quarter of 2022 at 5,451 million US dollars. The data begins at 4,699 million in the first quarter of 2021 and generally trends upwards through mid-2022 before dipping slightly towards the end of 2022. The first quarter of 2023 records 5,273 million, indicating a partial recovery from the previous quarter's decrease.
- Gross Margin
- Gross margin also experiences fluctuations, starting at 1,394 million US dollars in the first quarter of 2021. The gross margin reaches its highest point in the second quarter of 2021 at 1,619 million, followed by a downward trend towards the end of 2021. Afterward, it fluctuates moderately within the 1,247 to 1,477 million range before settling at 1,378 million in the first quarter of 2023. These variations generally align with changes in net sales but demonstrate more pronounced decreases in some periods.
- Gross Profit Margin Percentage
- The gross profit margin percentage indicates a gradual decline over the observed time frame. Starting at 29.46% in the first quarter of 2021, it reaches a high of 29.69% in the second quarter of 2021 but then follows a downward trend, falling consistently through 2022 and into early 2023, finally registering 26.37% in the first quarter of 2023. This decreasing gross profit margin suggests either rising costs relative to sales or pricing pressures affecting profitability.
Overall, while net sales and gross margin values fluctuate, the steadily decreasing gross profit margin percentage points to increasing challenges in maintaining profitability at the gross level. This trend warrants further investigation into cost management and pricing strategies to maintain financial health.
Operating Profit Margin
Carrier Global Corp., operating profit margin calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Operating profit | |||||||||||||
| Net sales | |||||||||||||
| Profitability Ratio | |||||||||||||
| Operating profit margin1 | |||||||||||||
| Benchmarks | |||||||||||||
| Operating Profit Margin, Competitors2 | |||||||||||||
| Boeing Co. | |||||||||||||
| Caterpillar Inc. | |||||||||||||
| Eaton Corp. plc | |||||||||||||
| GE Aerospace | |||||||||||||
| Honeywell International Inc. | |||||||||||||
| Lockheed Martin Corp. | |||||||||||||
| RTX Corp. | |||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q1 2023 Calculation
Operating profit margin = 100
× (Operating profitQ1 2023
+ Operating profitQ4 2022
+ Operating profitQ3 2022
+ Operating profitQ2 2022)
÷ (Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022
+ Net salesQ2 2022)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data reveals significant fluctuations in the company's operating profit across the observed periods. Starting at 571 million US dollars in the first quarter of 2021, this figure increased to a peak of 1,737 million US dollars by the first quarter of 2022, demonstrating a substantial rise in profitability. However, the operating profit experienced volatility afterward, falling sharply to 433 million US dollars by the last quarter of 2022, before slightly recovering to 555 million US dollars in the first quarter of 2023.
Net sales show a somewhat cyclical pattern with moderate variation but without a clear upward or downward trend over the periods. Sales peaked at 5,451 million US dollars in the third quarter of 2022 and reached a low point at 4,654 million US dollars in the first quarter of 2022. The net sales figures fluctuate between approximately 4,600 and 5,400 million US dollars, reflecting a relatively stable revenue base with seasonal or periodic factors impacting performance.
The operating profit margin, expressed as a percentage, parallels the fluctuations in operating profit, indicating shifts in profitability efficiency. The margin was highest in the third quarter of 2022 at 22.23%, showing strong profitability relative to sales during that quarter. Conversely, the margin dropped to its lowest point at 12.83% in the fourth quarter of 2021. The margin demonstrates responsiveness to changes in both operating profit and sales, reflecting changing cost structures or pricing power across the quarters.
- Operating Profit Trends
- Marked increase from early 2021 to early 2022, followed by significant volatility and decline toward the end of 2022.
- Net Sales Trends
- Relatively stable with moderate quarterly variations, peaking mid-to-late 2022 and showing no clear long-term growth trend.
- Operating Profit Margin Trends
- Fluctuated considerably, reaching a low in late 2021 and a high in late 2022, indicating variation in operational efficiency and cost control.
- Overall Insights
- The data suggests a period of strong earnings growth early on, followed by challenges impacting profitability despite stable sales levels. The decoupling of operating profit and net sales in certain quarters suggests shifts in cost management, pricing strategy, or external economic influences.
Net Profit Margin
Carrier Global Corp., net profit margin calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Net income attributable to common shareowners | |||||||||||||
| Net sales | |||||||||||||
| Profitability Ratio | |||||||||||||
| Net profit margin1 | |||||||||||||
| Benchmarks | |||||||||||||
| Net Profit Margin, Competitors2 | |||||||||||||
| Boeing Co. | |||||||||||||
| Caterpillar Inc. | |||||||||||||
| Eaton Corp. plc | |||||||||||||
| GE Aerospace | |||||||||||||
| Honeywell International Inc. | |||||||||||||
| Lockheed Martin Corp. | |||||||||||||
| RTX Corp. | |||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q1 2023 Calculation
Net profit margin = 100
× (Net income attributable to common shareownersQ1 2023
+ Net income attributable to common shareownersQ4 2022
+ Net income attributable to common shareownersQ3 2022
+ Net income attributable to common shareownersQ2 2022)
÷ (Net salesQ1 2023
+ Net salesQ4 2022
+ Net salesQ3 2022
+ Net salesQ2 2022)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Net Income Attributable to Common Shareowners
- The net income shows significant variability over the quarters. In 2021, the values ranged between 324 million and 487 million USD, with a peak in the second quarter. In 2022, a pronounced peak occurred in the first quarter at 1379 million USD, followed by fluctuations including a drop to 270 million USD in the fourth quarter. The first quarter of 2023 presents a moderate figure of 373 million USD. Overall, the pattern suggests volatility in profitability with occasional sharp increases.
- Net Sales
- Net sales demonstrate a relatively stable pattern with minor fluctuations. The 2021 quarters show values between approximately 4699 million and 5440 million USD, with a general plateau in sales during the year. In 2022, sales figures exhibit slight variation but remain between 4654 million and 5451 million USD. The first quarter of 2023 records a sales value of 5273 million USD, indicating a stable sales trend over the observed periods.
- Net Profit Margin
- The net profit margin exhibits trends corresponding to net income fluctuations but with noticeable changes in profitability percentages. In 2021, profit margins decline from around 12.65% in the second quarter to 8.07% in the fourth quarter. The first half of 2022 shows increased profitability with margins rising up to 13.5%. There is a peak in the third quarter of 2022 at 17.55%, followed closely by a slight decrease in the fourth quarter. The margin for the first quarter of 2023 decreases to 12.02%, reflecting reduced profitability compared to the late 2022 period but still maintaining a healthy margin relative to earlier periods.
- Summary of Trends and Insights
- The financial data reflects a company experiencing notable net income volatility while maintaining a relatively steady sales volume. The profit margin improvements in mid to late 2022 suggest enhanced operational efficiency or cost management during that period. However, the decline in net income and margin in the final quarter of 2022 and the first quarter of 2023 indicates some pressures impacting profitability despite stable sales. Overall, the data points to a cyclical pattern in earnings quality amidst consistent sales, requiring attention to factors influencing earnings volatility.
Return on Equity (ROE)
Carrier Global Corp., ROE calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Net income attributable to common shareowners | |||||||||||||
| Equity attributable to common shareowners | |||||||||||||
| Profitability Ratio | |||||||||||||
| ROE1 | |||||||||||||
| Benchmarks | |||||||||||||
| ROE, Competitors2 | |||||||||||||
| Boeing Co. | |||||||||||||
| Caterpillar Inc. | |||||||||||||
| Eaton Corp. plc | |||||||||||||
| GE Aerospace | |||||||||||||
| Honeywell International Inc. | |||||||||||||
| Lockheed Martin Corp. | |||||||||||||
| RTX Corp. | |||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q1 2023 Calculation
ROE = 100
× (Net income attributable to common shareownersQ1 2023
+ Net income attributable to common shareownersQ4 2022
+ Net income attributable to common shareownersQ3 2022
+ Net income attributable to common shareownersQ2 2022)
÷ Equity attributable to common shareowners
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial metrics reveals notable fluctuations and trends across the examined periods.
- Net Income Attributable to Common Shareowners
- This metric exhibited significant variability throughout the quarters. Initially, net income showed an increasing trend from 384 million US dollars in March 2021 to a peak of 487 million in June 2021. It then slightly declined in the following quarters of 2021, reaching 324 million by December. In the first quarter of 2022, a substantial increase occurred, with net income reaching 1379 million, followed by a sharp drop to 573 million in the subsequent quarter. The third quarter of 2022 saw another rise to 1312 million, but this was followed by a significant decline to 270 million in December 2022. The latest data point from March 2023 indicated a modest recovery to 373 million. Overall, the net income trend displays considerable volatility with peak values occurring in the first and third quarters of 2022.
- Equity Attributable to Common Shareowners
- The equity values showed a generally upward trend over the analyzed period. Starting at 6489 million US dollars in March 2021, equity increased gradually with minor fluctuations and reached 8134 million by March 2023. There was a notable slight dip in June 2022 to 6696 million after a previous rise to 7101 million in March 2022, but this was followed by a recovery and steady growth in subsequent quarters. The overall trend indicates strengthening equity base over the timeframe.
- Return on Equity (ROE)
- ROE demonstrated significant variability aligned with the net income changes. Initially high at 34.98% in March 2021, it peaked at 40.99% in June 2022 and reached a maximum of 50.17% in September 2022. Afterward, ROE declined to 45.55% in December 2022 and further down to 31.08% in March 2023. Despite the recent decline, ROE values remained above the initial 2021 levels in most quarters of 2022, illustrating periods of improved profitability relative to equity. The fluctuations in ROE appear to correlate strongly with the swings in net income.
Return on Assets (ROA)
Carrier Global Corp., ROA calculation (quarterly data)
| Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||
| Net income attributable to common shareowners | |||||||||||||
| Total assets | |||||||||||||
| Profitability Ratio | |||||||||||||
| ROA1 | |||||||||||||
| Benchmarks | |||||||||||||
| ROA, Competitors2 | |||||||||||||
| Boeing Co. | |||||||||||||
| Caterpillar Inc. | |||||||||||||
| Eaton Corp. plc | |||||||||||||
| GE Aerospace | |||||||||||||
| Honeywell International Inc. | |||||||||||||
| Lockheed Martin Corp. | |||||||||||||
| RTX Corp. | |||||||||||||
Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
1 Q1 2023 Calculation
ROA = 100
× (Net income attributable to common shareownersQ1 2023
+ Net income attributable to common shareownersQ4 2022
+ Net income attributable to common shareownersQ3 2022
+ Net income attributable to common shareownersQ2 2022)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals several noteworthy trends over the course of the observed periods. Net income attributable to common shareowners exhibits significant volatility, with notable peaks and troughs. The first quarter of 2022 stands out as a period of exceptional profitability, with net income reaching 1379 million US dollars, markedly higher than adjacent quarters. However, this high point is followed by a sharp decline in the subsequent quarters, with values oscillating between 270 and 1312 million US dollars. The most recent quarter shows a moderate recovery to 373 million US dollars.
Total assets demonstrate a more stable trajectory with modest fluctuations around a generally steady level. Although there is a slight decline from the end of 2021 into the first half of 2022, total assets rebound thereafter, culminating in the highest value recorded in the last quarter provided, at 26,411 million US dollars. This suggests effective asset management with maintenance of a substantial asset base throughout the periods.
The return on assets (ROA) metric highlights interesting dynamics in overall efficiency and profitability relative to the asset base. ROA starts relatively high in early 2021, fluctuating between approximately 6% and 9.7%, before improving significantly in 2022. The second and third quarters of 2022 show particularly strong performance, with ROA values exceeding 11% and peaking at over 14%. This elevated efficiency, however, diminishes slightly towards the most recent quarter, settling at 9.57%.
- Net Income
- Exhibits high volatility with a dramatic peak in the first quarter of 2022, followed by substantial fluctuations and a moderate rise in the latest quarter.
- Total Assets
- Remain relatively stable with minor declines and recoveries, ultimately reaching the highest level in the latest period reported.
- Return on Assets (ROA)
- Improves significantly throughout 2022, indicating increasing profitability relative to asset levels, before easing somewhat in the most recent quarter.
Overall, the data suggests a period of variable profitability, combined with generally stable asset management and an improving trend in asset efficiency during 2022, which slightly moderates at the start of 2023.