Eaton Corp. plc (NYSE:ETN)

Total Asset Turnover

Both reported and adjusted total asset turnover ratios demonstrate a consistent upward trajectory over the five-year period. Reported turnover increased from 0.56 in 2020 to 0.65 in 2024, indicating improved efficiency in using assets to generate sales. Adjusted figures reflect a similar rising trend, reaching 0.66 in 2024, reinforcing the observed operational enhancement.

Current Ratio

The reported current ratio exhibits volatility, declining sharply from 1.56 in 2020 to 1.04 in 2021, followed by a gradual recovery to 1.5 by 2024. The adjusted current ratio mirrors this pattern but consistently remains higher than the reported ratio across all years. This suggests some adjustment factors positively influence the assessment of short-term liquidity, with a stronger liquidity position restored after the dip in 2021.

Debt to Equity Ratio

This ratio shows a mild downward trend from 0.54 in 2020 to 0.49 in 2023, signaling a modest reduction in reliance on equity to finance debt. However, a slight increase to 0.50 reported and 0.52 adjusted in 2024 suggests a minor rebound in leverage. Throughout the period, adjusted figures remain close to reported values, indicating reliability in the underlying capital structure metrics.

Debt to Capital Ratio

The reported debt to capital ratio remains relatively stable, hovering around 0.33 to 0.35 across the years. Adjusted ratios are marginally higher but also stable. This indicates consistent capital structure management without significant shifts in the proportion of debt financing relative to total capital.

Financial Leverage

Financial leverage ratios for both reported and adjusted data show a gradual decline from 2020 through 2023, suggesting reduced leverage and potentially lower financial risk. The slight uptick in 2024 hints at a cautious increase in leverage, though overall leverage remains lower than at the start of the period.

Net Profit Margin

The reported net profit margin steadily increased from 7.9% in 2020 to 15.25% in 2024, indicating improved profitability and cost control. Adjusted net profit margin figures are more variable, peaking at 14.01% in 2021, dipping significantly in 2022 to 9.78%, and then recovering to over 13% in subsequent years. The disparity suggests adjustments may reflect one-time items or other factors affecting profitability in certain years.

Return on Equity (ROE)

Reported ROE exhibits a strong upward trend, rising from 9.44% in 2020 to an impressive 20.52% in 2024, implying a substantial increase in shareholders' returns. Adjusted ROE follows a similar pattern but with greater volatility, notably dropping in 2022 before rebounding. This variance again points to significant non-recurring elements impacting equity returns in some periods.

Return on Assets (ROA)

Reported ROA improves consistently over the timeframe, from 4.43% to 9.89%, reflecting enhanced asset utilization to generate net income. Adjusted ROA displays fluctuations—rising sharply in 2021, declining in 2022, and then stabilizing—aligning with observed patterns in profitability metrics and indicating some adjustments influence asset efficiency evaluations.

Net Sales

Net sales have consistently increased over the five-year period, rising from 17,858 million US dollars in 2020 to 24,878 million in 2024. This indicates a steady growth trend with an overall increase of approximately 39.3% over the period.

Total Assets

Total assets showed an upward trend from 31,824 million US dollars in 2020 to 38,432 million in 2023, before slightly declining to 38,381 million by the end of 2024. The general increase over the initial years suggests expansion or investment activities, with a plateau or slight contraction occurring in the final year.

Reported Total Asset Turnover

The reported total asset turnover ratio improved progressively from 0.56 in 2020 to 0.65 in 2024. This rising ratio reflects enhanced efficiency in utilizing assets to generate sales over the years, with the most notable increase occurring between 2023 and 2024.

Adjusted Net Sales

Adjusted net sales followed a similar upward trajectory as reported net sales, increasing steadily from 17,881 million US dollars in 2020 to 24,870 million in 2024. This alignment suggests consistency between reported and adjusted sales figures, with a slight difference in magnitude.

Adjusted Total Assets

Adjusted total assets mirrored the pattern in total assets, showing growth from 31,446 million US dollars in 2020 to a peak of 38,012 million in 2023, followed by a marginal decrease to 37,827 million in 2024. The consistency between adjusted and reported figures indicates reliability in asset valuation adjustments.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio increased gradually from 0.57 in 2020 to 0.66 in 2024. The steady improvement over the period indicates better asset utilization when considering adjusted figures, slightly outperforming the reported turnover ratios each year.

Current Assets

Current assets experienced a decline from 9,178 million US dollars in 2020 to 7,511 million in 2021, followed by a recovery and consistent growth in the subsequent years, reaching 11,801 million in 2024.

Current Liabilities

Current liabilities showed an increasing trend from 5,881 million US dollars in 2020 to 7,212 million in 2021, then decreased to 6,360 million in 2022 before rising again to 7,857 million in 2024.

Reported Current Ratio

The reported current ratio decreased sharply from 1.56 in 2020 to 1.04 in 2021, indicating a weakening liquidity position. This ratio then improved steadily over the following years, reaching approximately 1.5 by 2024, reflecting enhanced short-term financial health.

Adjusted Current Assets

Adjusted current assets followed a similar pattern to reported current assets, starting at 9,226 million US dollars in 2020, declining in 2021, and then increasing each year to reach 11,856 million in 2024.

Adjusted Current Liabilities

Adjusted current liabilities decreased from 5,651 million US dollars in 2020 to 5,871 million in 2022 after an initial increase in 2021, and then rose steadily thereafter, reaching 7,255 million in 2024.

Adjusted Current Ratio

The adjusted current ratio demonstrated a decline from 1.63 in 2020 to 1.11 in 2021, followed by a continuous improvement to 1.63 in 2024. This trend suggests that liquidity, after adjusting for certain factors, improved notably from its lowest point in 2021.

Overall Insights

The data reveals a notable dip in liquidity metrics in 2021, with both current assets and current ratios decreasing substantially, possibly indicating short-term financial pressures during that period. However, the subsequent consistent growth in current assets, alongside improving current ratios, points to recovery and strengthening liquidity over the years 2022 through 2024. Adjusted figures indicate a slightly higher liquidity position across all years compared to reported figures, underscoring the importance of adjustments for a more accurate assessment of short-term financial stability.

The financial data presents a steady evolution of the company’s capital structure over the five-year period from 2020 to 2024. Observing the total debt levels, there is a consistent increase from US$ 8,058 million in 2020, peaking at US$ 9,269 million in 2023, followed by a slight decrease to US$ 9,152 million in 2024. This indicates a generally increasing leverage position with a minor reduction in the final year.

Total shareholders’ equity exhibits a clear upward trend, growing from US$ 14,930 million in 2020 to US$ 19,036 million in 2023 before slightly declining to US$ 18,488 million in 2024. This increase in equity suggests a strengthening of the company’s net asset base over most of the period, despite a marginal decrease in the last year.

Reported debt to equity ratio

This ratio decreases from 0.54 in 2020 to 0.49 in 2023, reflecting a gradual improvement in the balance between debt and equity financing. The ratio slightly increases to 0.5 in 2024, indicating a minor rise in leverage relative to equity, but overall it shows a trend towards a more conservative capital structure.

Adjusted total debt and equity

Adjusted total debt mirrors the trend of reported total debt, rising from US$ 8,500 million in 2020 to US$ 9,937 million in 2023, with a further marginal increase to US$ 9,984 million in 2024. Adjusted equity figures also follow the pattern of reported equity, increasing steadily to US$ 19,854 million in 2023 before a moderate decline to US$ 19,123 million in 2024.

Adjusted debt to equity ratio

The adjusted debt to equity ratio declines from 0.55 in 2020 to 0.50 in 2023, indicating a reduction in leverage consistent with the reported ratio trend. However, it experiences a slight increase to 0.52 in 2024, reflecting a minor uptick in financial leverage in the last year of the period.

In summary, the company shows a consistent growth in equity base accompanied by a managed, gradual increase in debt levels. The leverage ratios, both reported and adjusted, trend downwards until 2023, signaling improved financial stability and conservative capital management. The slight reversals in 2024 suggest recent increments in indebtedness relative to equity, warranting monitoring in subsequent periods.

Total Debt

Total debt exhibited an overall upward trend from 2020 through 2023, increasing from 8,058 million US dollars to 9,269 million US dollars. However, there was a slight decline in 2024 to 9,152 million US dollars, indicating a modest reduction in debt levels after a period of growth.

Total Capital

Total capital showed a consistent increase from 22,988 million US dollars in 2020 to a peak of 28,305 million US dollars in 2023, reflecting growth in the company’s capital base. In 2024, total capital decreased somewhat to 27,640 million US dollars, suggesting a minor contraction but still maintaining a position substantially above the 2020 level.

Reported Debt to Capital Ratio

The reported debt to capital ratio displayed a gradual decline over the period, starting at 0.35 in 2020 and moving down to 0.33 by 2023, maintaining this level into 2024. This trend suggests a modest improvement in capital structure, with debt comprising a slightly smaller proportion of total capital over time.

Adjusted Total Debt

Adjusted total debt values followed a similar pattern to reported total debt, rising steadily from 8,500 million US dollars in 2020 to 9,937 million US dollars in 2023. There was a slight increase in 2024 to 9,984 million US dollars, indicating a continued rise in adjusted debt levels into the final year observed.

Adjusted Total Capital

Adjusted total capital increased consistently from 23,919 million US dollars in 2020 to a high of 29,791 million US dollars in 2023. In 2024, adjusted total capital declined to 29,107 million US dollars, mirroring the slight decrease seen in reported total capital, yet remaining considerably higher than the initial year.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio started at 0.36 in 2020, decreased to 0.33 by 2023, and then rose slightly to 0.34 in 2024. This indicates an improvement in debt leverage through most of the period, followed by a minor increase in debt relative to capital in the last year.

The data reveals a consistent upward trend in both total assets and total shareholders' equity over the five-year period. Total assets increased from 31,824 million US dollars in 2020 to 38,381 million US dollars in 2024, showing steady growth year over year, with a notable acceleration between 2022 and 2023. Similarly, total shareholders' equity rose from 14,930 million US dollars in 2020 to a peak of 19,036 million US dollars in 2023, followed by a slight decline to 18,488 million US dollars in 2024.

Financial leverage, as reported, shows a mild decline from 2.13 in 2020 to 2.02 in 2023, indicating a gradual reduction in the use of debt relative to equity, before slightly increasing to 2.08 in 2024. This suggests a more conservative leverage position over most of the period, with some reversal in the last year.

The adjusted figures, which presumably reflect certain accounting or valuation adjustments, follow a similar trajectory. Adjusted total assets grew from 31,446 million US dollars in 2020 to 37,827 million US dollars in 2024, paralleling the trend in reported total assets but consistently slightly lower. Adjusted total equity also increased from 15,419 million US dollars to 19,123 million US dollars over the period, with a peak in 2023 before a slight reduction in 2024.

Adjusted financial leverage mirrored the reported leverage trend, declining from 2.04 in 2020 to 1.91 in 2023, then rising marginally to 1.98 in 2024. These ratios indicate a cautiously managed increase in leverage over the period, with a deliberate emphasis on maintaining or lowering leverage ratios until the last year.

Assets and Equity Growth

Total assets and shareholders’ equity consistently increased, indicating expansion and strengthening of the company's asset base and capital structure, with a minor pullback in equity in 2024.

Leverage Trends

Both reported and adjusted financial leverage decreased steadily through 2023, reflecting reduced dependency on debt financing, but showed a slight uptick in 2024, suggesting a modest increase in leverage.

Adjusted vs. Reported Measures

Adjusted values closely follow reported figures, confirming the trends observed while providing a slightly more conservative view of the company's financial position.

Net Income Attributable to Ordinary Shareholders

The net income showed consistent growth over the five-year period, rising from 1,410 million US dollars in 2020 to 3,794 million US dollars in 2024. This indicates a strengthening profitability trend and improved earnings capacity.

Net Sales

Net sales increased steadily each year, growing from 17,858 million US dollars in 2020 to 24,878 million US dollars in 2024. This reflects a positive revenue growth trajectory and potential expansion in market presence or sales volume.

Reported Net Profit Margin

The reported net profit margin improved significantly, moving from 7.9% in 2020 to 15.25% in 2024. This indicates enhanced operational efficiency and better control over costs relative to sales, resulting in higher profitability per unit of revenue.

Adjusted Net Income

Adjusted net income displayed some variability but generally increased from 1,513 million US dollars in 2020 to 3,293 million US dollars in 2024. Notably, there was a dip in 2022 to 2,037 million US dollars, followed by a recovery in subsequent years. This suggests the presence of one-time items or adjustments impacting reported figures during the period.

Adjusted Net Sales

Adjusted net sales also demonstrated consistent growth, rising from 17,881 million US dollars in 2020 to 24,870 million US dollars in 2024. The slight difference compared to reported net sales suggests minor adjustments but does not significantly alter the overall sales growth pattern.

Adjusted Net Profit Margin

The adjusted net profit margin experienced fluctuations, starting from 8.46% in 2020 and reaching a peak of 14.01% in 2021, after which it declined to 9.78% in 2022 and then rose again to 13.24% by 2024. These variations reflect the impact of non-recurring adjustments on profitability and highlight that underlying earnings power may be more volatile than reported margins imply.

Net Income Attributable to Eaton Ordinary Shareholders

The net income exhibited a consistent upward trend over the five-year period. Starting from $1,410 million in 2020, it increased steadily each year, reaching $3,794 million by the end of 2024. This reflects significant growth in profitability, with the most notable increases occurring between 2020 and 2021, and then again from 2022 to 2024.

Total Eaton Shareholders’ Equity

Shareholders' equity demonstrated a generally positive trend from 2020 to 2023, rising from $14,930 million to a peak of $19,036 million. However, there was a slight decline in 2024 to $18,488 million. Despite this minor decrease, equity levels remain substantially higher than at the beginning of the period, indicating overall strengthened financial standing.

Reported Return on Equity (ROE)

The reported ROE showed consistent improvement throughout the timeframe. Starting at 9.44% in 2020, it increased each year, reaching 20.52% in 2024. This suggests that the company has been increasingly effective at generating profits from its shareholders' equity over time, with the highest rate of return recorded in the final year.

Adjusted Net Income

Adjusted net income generally followed a positive trajectory but with more volatility compared to reported net income. It increased sharply from $1,513 million in 2020 to $2,773 million in 2021, then decreased to $2,037 million in 2022, before rising again in 2023 and 2024, reaching $3,293 million. Despite the dip in 2022, the adjusted figures exhibit substantial growth overall.

Adjusted Total Equity

Adjusted total equity rose steadily from $15,419 million in 2020 to a high of $19,854 million in 2023, followed by a slight decline to $19,123 million in 2024. This pattern parallels the trend in total equity and suggests overall stability with minor fluctuation at the end of the period.

Adjusted Return on Equity (ROE)

The adjusted ROE exhibited more variability compared to the reported ROE. It increased from 9.81% in 2020 to a peak of 16.02% in 2021, then fell to 11.33% in 2022. Following this decline, it rose again to 16.2% in 2023 and modestly to 17.22% in 2024. This indicates fluctuating efficiency in utilizing adjusted equity to generate profits, though showing improvement after the dip in 2022.

Net Income Attributable to Ordinary Shareholders

The net income demonstrates a consistent upward trend over the five-year period. Starting at 1,410 million US dollars in 2020, it increased steadily each year, reaching 3,794 million US dollars in 2024. This indicates strong and continuous growth in profitability.

Total Assets

Total assets increased moderately from 31,824 million US dollars in 2020 to 38,432 million US dollars in 2023, with a slight decline to 38,381 million US dollars in 2024. This suggests a general expansion in the company's asset base, though the plateau in the last year may indicate stabilization or asset optimization.

Reported Return on Assets (ROA)

The reported ROA shows a positive and consistent increase over the period, moving from 4.43% in 2020 to 9.89% in 2024. The nearly doubling of ROA indicates improved efficiency in generating income from assets.

Adjusted Net Income

Adjusted net income exhibits more variability compared to reported net income. It increased from 1,513 million US dollars in 2020 to 2,773 million US dollars in 2021, then declined to 2,037 million US dollars in 2022 before rising again to 3,293 million US dollars in 2024. Despite fluctuations, the overall trend remains positive, with recovery and growth noted after 2022.

Adjusted Total Assets

Adjusted total assets mirror the trend of reported total assets, increasing from 31,446 million US dollars in 2020 to 38,012 million US dollars in 2023, followed by a minor decrease to 37,827 million US dollars in 2024. The trend indicates growth with a slight recent contraction.

Adjusted Return on Assets (ROA)

The adjusted ROA experienced fluctuations, rising sharply from 4.81% in 2020 to 8.23% in 2021, then falling to 5.87% in 2022, before increasing again to 8.71% in 2024. The variations suggest that while asset utilization efficiency improved overall, there were periods of reduced performance possibly linked to external or operational factors affecting profitability.