FedEx Corp. (NYSE:FDX)

The financial data reveals several notable trends over the six-year period from May 31, 2020, to May 31, 2025.

Return on Assets (ROA)

The ROA showed a significant increase from 1.75% in 2020 to 6.32% in 2021, indicating improved efficiency in asset utilization during that time. Following this peak, ROA experienced a decline to 4.45% in 2022 but then stabilized with minor fluctuations, reaching 4.67% in 2025. Overall, this reflects a recovery from the initial rise and subsequent decline, settling at a moderate level higher than the starting point in 2020.

Financial Leverage

Financial leverage consistently decreased over the observed period, starting at a high of 4.02 in 2020, then dropping steadily each year to 3.12 by 2025. This trend suggests a gradual reduction in the company’s reliance on debt financing relative to equity, potentially lowering financial risk and indicating a more conservative capital structure.

Return on Equity (ROE)

The ROE followed a pattern similar to ROA, with a sharp rise from 7.03% in 2020 to a peak of 21.64% in 2021. Afterward, it declined to around 15% in subsequent years and remained relatively stable with slight variations, ending at 14.58% in 2025. This suggests that while equity profitability peaked early in the period, the company maintained a moderately strong return on equity thereafter.

In summary, the company exhibited improved profitability and asset utilization in 2021, followed by some normalization. The steady decline in financial leverage signals a strategic move toward reduced debt dependence. Both ROA and ROE suggest an enhancement in financial performance compared to the base year, although the peak levels achieved in 2021 were not sustained in the long term.

The analysis of the financial ratios over the period from May 31, 2020, to May 31, 2025, reveals various trends in profitability, efficiency, leverage, and overall return to equity.

Net Profit Margin

The net profit margin exhibited significant improvement from 1.86% in 2020 to a peak of 6.23% in 2021. Subsequently, it experienced a decline to 4.09% in 2022 but showed a moderate rebound to 4.94% by 2024. In 2025, there was a slight decrease to 4.65%. Overall, the margin improved markedly in the early period, maintained a stable mid-range thereafter, though not reaching the previous peak.

Asset Turnover

Asset turnover increased steadily from 0.94 in 2020 to a high of 1.09 in 2022, indicating enhanced efficiency in utilizing assets to generate revenue. After 2022, the ratio declined slightly to 1.03 in 2023 and continued a modest downward trend to 1.00 by 2025, suggesting a slight decrease in asset utilization efficiency towards the end of the period.

Financial Leverage

Financial leverage decreased consistently from 4.02 in 2020 to 3.12 in 2025. This downward trajectory indicates a reduction in the use of debt relative to equity, which may reflect a more conservative capital structure or repayment of liabilities over time.

Return on Equity (ROE)

ROE followed a pattern similar to net profit margin, rising sharply from 7.03% in 2020 to 21.64% in 2021. It then declined to 15.34% in 2022 and maintained relatively stable levels around 15.2% to 15.7% through 2024, before a slight drop to 14.58% in 2025. This suggests that after an initial period of high profitability, the returns stabilized at a sustainable level albeit slightly lower than the peak year.

In summary, the data indicates an initial strong performance improvement in profitability and return metrics in 2021, followed by a period of stabilization and mild decline. Asset utilization peaked mid-period before tapering off, while financial leverage progressively decreased, reflecting a potential strategic shift towards lower financial risk. The interplay of these factors resulted in a more moderate but stable return on equity in the later years.

Tax Burden

The tax burden ratio remained relatively stable over the analyzed periods, fluctuating narrowly between 0.74 and 0.78. This indicates consistent effective tax rates affecting net income.

Interest Burden

The interest burden ratio experienced an increase from 0.71 in 2020 to approximately 0.89 in 2021, maintaining nearly the same higher level thereafter. This suggests an improvement in operating income after interest expenses, possibly due to reduced interest costs or increased operating earnings.

EBIT Margin

The EBIT margin showed significant improvement from 3.38% in 2020 to a peak of 8.89% in 2021, followed by some variability but remaining above 5.9% in subsequent years. This indicates enhanced operational efficiency and profitability since 2020, albeit with some fluctuations.

Asset Turnover

Asset turnover ratios increased from 0.94 in 2020 to a high of 1.09 in 2022, then showed a slight gradual decline back to 1 by 2025. This suggests a period of improved efficiency in using assets to generate revenue, followed by stabilization.

Financial Leverage

Financial leverage decreased steadily from 4.02 in 2020 to 3.12 by 2025, indicating a reduction in reliance on debt or increased equity financing, contributing to a potentially lower financial risk profile.

Return on Equity (ROE)

ROE experienced strong growth from 7.03% in 2020 to a peak of 21.64% in 2021, followed by a decline and stabilization around 14.5% to 15.7% in recent years. This trend reflects initial substantial improvements in profitability and shareholder returns, with a moderation but sustained return performance in later periods.

Net Profit Margin

The net profit margin showed a significant increase from 1.86% in 2020 to a peak of 6.23% in 2021, indicating improved profitability during this period. Subsequently, it declined to 4.09% in 2022, followed by a modest recovery to 4.94% in 2024. The margin decreased slightly to 4.65% in 2025, suggesting some pressure on profit levels but generally maintaining a position above the 2020 baseline.

Asset Turnover

The asset turnover ratio exhibited a gradual upward trend from 0.94 in 2020 to 1.09 in 2022, reflecting enhanced efficiency in using assets to generate sales. However, after 2022, the ratio declined slightly to around 1.00 by 2025, indicating a stabilization but with a mild reduction in asset utilization efficiency compared to the peak year.

Return on Assets (ROA)

ROA increased markedly from 1.75% in 2020 to 6.32% in 2021, paralleling the net profit margin trend and implying improved overall profitability and asset efficiency. Following this peak, ROA decreased to 4.45% in 2022, then maintained a relatively stable range between 4.56% and 4.98% through 2024, before a slight decline to 4.67% in 2025. This pattern indicates sustained but reduced returns compared to the 2021 high.

Tax Burden

The tax burden ratio remained relatively stable over the period, fluctuating slightly between 0.74 and 0.78. It started at 0.77 in 2020, increased slightly in 2021 and 2022 to 0.78, then declined to 0.74 by 2023 and 2024, before a marginal increase to 0.75 in 2025. This indicates a consistent proportion of earnings retained after taxes with minor variations.

Interest Burden

The interest burden ratio showed notable improvement from 2020 to 2021, rising from 0.71 to 0.89. It then remained relatively stable at around 0.87 to 0.89 through 2025. This suggests a reduction in interest expenses relative to earnings before interest and taxes (EBIT), reflecting improved financial leverage or lower interest costs in recent years.

EBIT Margin

The EBIT margin experienced significant fluctuations. It increased sharply from 3.38% in 2020 to 8.89% in 2021, indicating a marked improvement in operating profitability. However, it declined to 5.97% in 2022 before gradually increasing again to peak at 7.5% in 2024, then slightly falling to 7.09% in 2025. Overall, the margin remains considerably higher than in 2020, highlighting improved operational efficiency with some variability.

Asset Turnover

Asset turnover showed a gradual upward trend initially, moving from 0.94 in 2020 to a high of 1.09 in 2022. Afterwards, it declined slightly to 1.03 in 2023, and further to 1.01 and 1.00 in the following years. This indicates a generally stable efficiency in using assets to generate revenue, with a modest peak in 2022 followed by a slight reduction, though still above the 2020 starting point.

Return on Assets (ROA)

ROA exhibited a similar pattern to EBIT margin, reflecting profitability trends. It rose substantially from 1.75% in 2020 to 6.32% in 2021, signaling improved overall asset profitability. After a decline to 4.45% in 2022, ROA gradually increased to 4.98% in 2024 before dipping slightly to 4.67% in 2025. Despite some fluctuation, the return remains significantly above the initial value, confirming enhanced asset utilization and profit generation capacity over the analysis period.

Tax Burden

The tax burden ratio remained relatively stable across the six-year period, fluctuating slightly between 0.74 and 0.78. This indicates a consistently moderate impact of taxation on the company's earnings before tax, with a minor decline observed starting from the fiscal year ending May 2023 and maintaining a slightly lower level thereafter.

Interest Burden

The interest burden ratio showed a notable increase from 0.71 in May 2020 to approximately 0.89 in May 2021, where it remained fairly consistent through May 2024, before a slight decline to 0.87 in May 2025. This trend suggests an improvement in operating income relative to interest expenses after 2020, reflecting more favorable interest cost management or debt structure in the subsequent years.

EBIT Margin

The EBIT margin experienced significant volatility during the reported period. Starting at a low 3.38% in 2020, it peaked sharply to 8.89% in 2021, then decreased to 5.97% in 2022, followed by a moderate recovery to levels around 6.72% to 7.5% in 2023 and 2024 respectively, with a small decline to 7.09% in 2025. This pattern indicates fluctuations in operating profitability, with a marked improvement post-2020 but no clear trend of continued growth after 2021.

Net Profit Margin

The net profit margin showed a similar pattern of fluctuation as the EBIT margin. Beginning at 1.86% in 2020, it rose sharply to 6.23% in 2021, then dropped to 4.09% in 2022. Thereafter, it exhibited gradual growth to 4.94% in 2024 before declining slightly to 4.65% in 2025. The trend suggests that despite improvements in operating profit, the company’s bottom line has seen some pressure, possibly from other expenses or non-operating factors affecting net profitability.