Delta Air Lines Inc. (NYSE:DAL)

Return on Assets (ROA)

The Return on Assets showed a generally positive and stable performance from March 2018 to December 2019, fluctuating between approximately 5.99% and 7.42%. Beginning in March 2020, there was a sharp decline where ROA turned negative, reaching its lowest point at -17.20% in December 2020. This significant downturn persisted through 2021, with values improving slightly but remaining negative or close to zero until mid-2021. From the third quarter of 2021 onwards, ROA returned to positive territory, albeit at much lower levels compared to the pre-2020 period, indicating a recovery phase.

Financial Leverage

Financial leverage demonstrated moderate variability from March 2017 through December 2019, maintaining a range roughly between 3.71 and 4.8. Starting in the first quarter of 2020, leverage increased drastically, surging to extremely high levels, peaking notably at 151.62 in the first quarter of 2021. Thereafter, leverage decreased notably but remained elevated relative to the earlier years, settling between approximately 18.64 and 24.66 in late 2021 and mid-2022. This pattern suggests a substantial increase in debt or liabilities relative to equity during the pandemic onset, followed by partial deleveraging.

Return on Equity (ROE)

The Return on Equity followed a strong positive trend from March 2018 through December 2019, with values ranging between about 25% and 32%, indicative of robust equity returns. Commencing in the first quarter of 2020, ROE experienced a dramatic and sustained decline, reaching extreme negative values such as -807.37% in the third quarter of 2020 and -2702.9% by December 2020, indicating severe financial distress and losses relative to shareholder equity during this period. Subsequent quarters into late 2021 and mid-2022 showed some recovery, with ROE gradually improving back towards positive territory, reaching mid-teen percentages by June 2022, but still below the pre-2020 positive trend.

Overall Insights

The data reveal a pronounced financial impact starting in early 2020, most likely associated with external disruptions affecting asset returns, equity performance, and capital structure. The extreme increase in financial leverage corresponds with sharply negative profitability metrics (ROA and ROE), indicative of heightened financial risk. Although there are signs of recovery beginning in mid-2021, profitability remains below pre-2020 levels, and leverage, while diminished from peak highs, continues to be substantially elevated. This pattern suggests ongoing challenges in restoring financial health and profitability to historical norms.

The analysis of the quarterly financial metrics reveals distinct patterns and significant fluctuations over the observed periods.

Net Profit Margin (%)

The net profit margin shows a generally positive trend from early 2017 through the end of 2019, ranging between approximately 7.7% and 10.1%. However, beginning in the first quarter of 2020, there is a marked deterioration with values dropping sharply into negative territory, reaching a nadir of -102.96% by the end of 2020. This steep decline likely reflects extraordinary challenges during this timeframe. Following this low point, the margin improves gradually but remains close to zero or modestly positive through mid-2022, indicating a slow recovery phase.

Asset Turnover (ratio)

Asset turnover ratios from 2017 to early 2020 are relatively stable, fluctuating narrowly between 0.73 and 0.80. Starting from March 2020, this ratio experiences a considerable decline, dropping to a low of 0.17 by December 2020. Thereafter, a slow but steady increase is observed, reaching 0.56 by mid-2022. This pattern suggests significant reductions in asset utilization during the peak impact period, followed by progressive improvement.

Financial Leverage (ratio)

Financial leverage remains moderately stable around 3.7 to 4.8 from 2017 through early 2020. Beginning in March 2020, there is an unprecedented surge, with leverage spiking dramatically to a peak of 151.62 by the first quarter of 2021. Though it declines in subsequent quarters, it stays substantially elevated relative to pre-2020 levels, settling between approximately 19.6 and 27.9 by mid-2022. This sharp rise indicates a substantial increase in debt relative to equity, reflecting heightened financial risk during crisis periods and partial deleveraging afterward.

Return on Equity (ROE) (%)

ROE trends from 2017 until the end of 2019 are robust and consistently high, ranging mostly from 25% to above 32%, indicating strong shareholder returns. However, from March 2020 onward, ROE collapses dramatically, plunging to an extreme negative value of -2702.9% by the last quarter of 2020. Despite some volatility, it remains deeply negative through early 2021, evidencing substantial losses. From mid-2021, ROE improves significantly, transitioning back to positive territory by the third quarter and reaching around 15.7% by mid-2022, signaling a recovery in profitability and capital efficiency.

In summary, the company displayed solid profitability and capital efficiency before 2020. The onset of 2020 coincides with severe declines across all key metrics—net profit margin, asset turnover, and ROE—accompanied by a marked increase in financial leverage, indicating financial stress and operational challenges during this period. Subsequent quarters show gradual improvement in these metrics, highlighting initial stages of recovery, though leverage levels remain elevated compared to pre-crisis periods.

The financial data reflects significant fluctuations across multiple key indicators over the analyzed periods, illustrating the impact of various operational and external factors.

Tax Burden

The tax burden ratio exhibits a generally increasing trend from 0.63 in early 2018 to a peak near 0.77 around late 2019. This indicates a rising proportion of earnings allocated to taxes during that timeframe. Thereafter, data is missing for a period before showing a moderate decline to approximately 0.62 by mid-2022, suggesting some relief or adjustments in tax expenses relative to pre-tax earnings in recent quarters.

Interest Burden

The interest burden ratio maintains a stable range around 0.93 to 0.95 from early 2018 through late 2019, indicating a consistent interest expense level relative to operating profit. However, a drastic reversal is observed post-2019, with a sharp drop to negative values in early 2021, followed by a recovery to a positive range near 0.46 by mid-2022. This volatility likely reflects fluctuations in debt costs or changes in reported interest expenses during periods of financial distress.

EBIT Margin

This margin shows a downward trend beginning at approximately 14.78% in early 2018, declining modestly through 2019 to around 10.95%. Following this, there is a dramatic negative shift from late 2019 through early 2021, with margins plunging to negative values as low as -120.79%, reflecting severe operational losses. Recovery signs appear in subsequent quarters, with margins slowly improving to around 5.01% by mid-2022, yet still below pre-crisis levels.

Asset Turnover

Asset turnover remains relatively stable near 0.73 to 0.8 from early 2018 to late 2019, indicating consistent efficiency in asset utilization. Post-2019, a significant decline is evident, bottoming out at 0.17 in late 2020, signaling reduced asset productivity. A gradual recovery trend starts thereafter, reaching 0.56 by the middle of 2022, although still below earlier historical levels.

Financial Leverage

A notable upward trajectory is observed in financial leverage, increasing steadily from about 3.83 in early 2017 to a peak of 151.62 in early 2021. This substantial rise suggests heightened reliance on debt financing or an expanded equity base contraction. Following this peak, leverage decreases markedly but remains elevated compared to earlier periods, settling near 19.63 by mid-2022.

Return on Equity (ROE)

ROE shows strong positive performance through 2018 and 2019, fluctuating mostly between 25% and 32%, indicative of robust value generation for shareholders. Subsequently, there is an extreme deterioration in ROE, with precipitous declines into deeply negative territory through 2020 and early 2021, reaching levels below -2700%. This drastic drop underscores severe losses and potential erosion of shareholder equity. Partial recovery is noted thereafter, with ROE rising to approximately 15.74% by mid-2022, approaching pre-crisis profitability but not yet fully restored.

Overall, the data reveal a period of stable operations and profitability through 2019, followed by a severe downturn aligned with significant operational losses, reduced efficiency, and increased financial risk. Subsequent quarters demonstrate emerging signs of recovery, with improvements in profitability, leverage, and asset utilization, though not yet reaching prior peak levels.

The analyzed financial metrics exhibit notable fluctuations across the reported periods, indicative of significant operational and financial impacts.

Net Profit Margin (%)

From early 2018 through the end of 2019, the net profit margin consistently remains positive, ranging roughly between 7.7% and 10.1%, suggesting stable profitability during this period. However, beginning in the first quarter of 2020, the margin sharply declines into negative territory, reaching its lowest point at -102.96% by the end of 2020. This drastic downturn reflects a severe reduction in profitability, likely driven by extraordinary circumstances affecting operations.

Following this trough, a gradual recovery is observed starting in early 2021, with the margin improving toward slightly positive percentages by mid to late 2022, reaching approximately 1.44%. Despite this improvement, the net profit margin remains significantly below pre-2020 levels, indicating ongoing challenges in restoring profitability completely.

Asset Turnover (ratio)

Prior to 2020, asset turnover maintains relatively stable values around 0.73 to 0.8, reflecting consistent efficiency in generating revenue from assets. Entering 2020, a sharp decline ensues, with the ratio dropping from 0.66 in the first quarter to a low of 0.17 by the end of 2020, signifying decreased utilization of assets to produce sales or revenue.

Gradual improvement is evident throughout 2021 and into 2022, rising steadily to 0.56 by the mid-2022 period. This recovery suggests efforts or market factors aiding the company in better leveraging its asset base, though the ratio has not yet returned to pre-crisis levels.

Return on Assets (ROA) (%)

The ROA aligns closely with trends in net profit margin and asset turnover, indicating operational efficiency and profitability. It remains positive and moderately stable between approximately 5.99% and 7.42% from early 2018 through 2019, corroborating a period of reasonable profitability and asset efficiency.

Starting in early 2020, a significant decline occurs, with ROA falling into negative territory, bottoming at -17.83% by the end of 2020. This negative ROA illustrates a period of losses relative to asset base, reflective of substantial operational setbacks.

Subsequently, a slow but steady recovery is noted during 2021 and 2022, with ROA improving to near 0.8% by mid-2022. Despite this upward trend, profitability relative to assets remains well below historic norms.

In summary, the data reveals a stable and profitable operating environment from 2018 through 2019, followed by a sharp and dramatic decline throughout 2020 that severely affected profitability and asset utilization. Recovery is underway but remains incomplete as of mid-2022, indicating ongoing challenges in returning to previous performance levels.

Tax Burden

The tax burden ratio shows a generally increasing trend from 0.63 in the first available quarter of 2018 to a peak near 0.77 in 2019, indicating a relatively stable portion of earnings retained after tax during this period. There is a slight decline observed during 2022, decreasing from 0.7 to 0.62, which may reflect changes in tax expenses or profitability.

Interest Burden

The interest burden ratio maintains a steady value around 0.93 to 0.95 throughout most of the periods until early 2020. However, an unusual negative value appears in the first quarter of 2021 (-0.3), followed by a recovery trend to positive but lower ratios by mid-2022 (0.46). This volatility suggests significant fluctuations in interest expenses or earnings before interest and taxes during the pandemic and recovery phases.

EBIT Margin

EBIT margin percentages demonstrate a declining pattern starting around 14.78% in early 2018, gradually decreasing to 10.95% by early 2020. A sharp drop becomes evident during 2020, reaching deeply negative margins as low as -120.79% by the end of the same year, reflecting severe operational profitability challenges likely attributable to the pandemic. Recovery begins in 2021, with improvements to marginally positive margins around 5%, stabilizing through mid-2022 but still well below pre-pandemic levels.

Asset Turnover

Asset turnover ratios remain fairly stable near 0.7 to 0.8 from 2018 through 2019, indicating consistent asset utilization efficiency. The ratio then declines significantly beginning in 2020, dropping to as low as 0.17 by year-end 2020, which highlights reduced operational activity or underutilization of assets during the pandemic. A gradual recovery trend is observed in 2021 and 2022, with ratios rising to 0.56 by mid-2022, signaling improving efficiency but not yet reaching prior levels.

Return on Assets (ROA)

ROA values follow a similar pattern to EBIT margin and asset turnover. The ratio remains healthy around 6-7% during 2018 and 2019, decreases sharply in 2020 to negative values (as low as -17.83%), indicating losses on asset investment during the crisis. From early 2021, ROA gradually improves but remains close to zero or slightly positive through 2022, demonstrating ongoing challenges in generating returns on assets comparable to pre-crisis periods.

Tax Burden

The tax burden ratio shows an overall increasing trend from the first observation in March 2018 at 0.63 to a peak of 0.77 in late 2019, indicating a progressively higher proportion of pre-tax income being retained after tax during that period. Following this peak, the ratio experiences some fluctuations but remains relatively stable around 0.7 to 0.73 by mid-2022, suggesting a consistent tax impact on earnings in recent quarters.

Interest Burden

Interest burden is relatively stable around 0.93 to 0.95 from March 2018 through late 2019, implying consistent interest expenses relative to operating income. However, starting in 2020, there is notable volatility and volatility with a sharp decline to a negative ratio (-0.3) in early 2021, followed by a steady recovery to positive values reaching 0.46 by mid-2022. This indicates an unusual fluctuation in interest expense or income relative to operating profit during the pandemic period and subsequent recovery.

EBIT Margin

The EBIT margin declines gradually from 14.78% in early 2018 to approximately 10.95% at the beginning of 2020, indicating weakening operating profitability. Subsequently, there is a substantial drop during 2020 and early 2021, reaching extremely negative margins down to -120.79%, reflecting significant operating losses likely due to extraordinary events affecting revenue or costs. From mid-2021 onward, there is a gradual recovery with margins improving to around 5% by mid-2022, yet still well below pre-2020 levels, indicating partial operational recovery but continued challenges.

Net Profit Margin

The net profit margin trends closely mirror the EBIT margin with a stable range near 8-10% from 2018 through 2019, indicative of profitable net operations pre-2020. In 2020, net margins sharply decline to deeply negative values, hitting nearly -103%, signaling severe net losses. A recovery phase begins in late 2021, with margins climbing back to positive albeit low levels around 1.4-1.5% by mid-2022, suggesting partial restoration of profitability but remaining far below historical norms.