Honeywell International Inc. (NASDAQ:HON)

The analysis of the financial ratios over the five-year period reveals several noteworthy trends and fluctuations.

Total Asset Turnover

Both the reported and adjusted total asset turnover ratios indicate an initial upward trend from 2020 through 2023, increasing from approximately 0.51 to 0.60 in the reported figures and from 0.52 to 0.59 in the adjusted figures. However, there is a noticeable decline in 2024, dropping back to 0.51 in both measures, which may suggest a reduction in asset efficiency during the most recent year.

Current Ratio

The reported current ratio exhibits a gradual decline from 1.47 in 2020 to 1.25 in 2022, followed by moderate recovery to 1.31 by 2024. The adjusted current ratio, consistently higher than the reported, follows a similar pattern but with a more pronounced decline from 1.83 in 2020 to 1.59 in 2022 and stabilization around 1.63 thereafter. This pattern suggests a slight weakening in short-term liquidity during the middle years, stabilizing in the later period.

Debt to Equity Ratio

Reported debt to equity shows volatility, beginning at 1.28 in 2020, falling to 1.06 in 2021, then increasing progressively to 1.67 by 2024. The adjusted figures demonstrate a similar trajectory but at lower levels, moving from 0.95 to 1.23 over the same period. This trend reflects an increasing reliance on debt financing relative to equity, particularly apparent in the most recent years, which could imply higher financial risk.

Debt to Capital Ratio

Both reported and adjusted debt to capital ratios present gradual increases, with reported values rising from 0.56 to 0.63 and adjusted from 0.49 to 0.55 between 2020 and 2024. This consistent upward movement aligns with the increasing debt to equity ratios, further indicating an incremental increase in leverage.

Financial Leverage

The reported financial leverage ratio shows a steady rise from 3.68 in 2020 to 4.04 in 2024, while the adjusted leverage grows more moderately from 2.62 to 2.88 over the same period. This trend suggests a progressively higher utilization of debt within the capital structure, which might affect the company's risk profile.

Net Profit Margin

The reported net profit margin fluctuates around the mid-teens percentage, increasing from 14.64% in 2020 to a peak of 16.11% in 2021, dipping to 14.00% in 2022, then recovering somewhat to 14.82% by 2024. The adjusted net profit margin shows more variability, with a peak at 18.01% in 2021 and a trough at 12.85% in 2022, followed by a rebound to 15.66% in 2024. These oscillations indicate some volatility in profitability margins over the period.

Return on Equity (ROE)

The reported ROE displays an upward trend from 27.23% in 2020 to a high of 35.68% in 2023, before declining to 30.64% in 2024. Adjusted ROE shows a rise from 20.36% in 2020 to 23.58% in 2021, followed by a decline to 18.64% in 2022 and a recovery to 23.08% by 2024. The overall trend suggests strong equity returns with some volatility, highlighting varying efficiency in generating shareholder returns.

Return on Assets (ROA)

Reported ROA increases from 7.40% in 2020 to 9.20% in 2023, before falling to 7.59% in 2024. Adjusted ROA demonstrates a similar pattern: rising to 9.71% in 2021, then decreasing to 7.41% in 2022, with a modest increase to 8.02% in 2024. These fluctuations reflect variation in asset profitability, with a peak in the middle years and subsequent moderation.

In summary, the data indicate increasing leverage over the examined period, as evidenced by higher debt ratios and financial leverage metrics, coupled with fluctuating profitability and efficiency measures. Asset turnover improved initially but fell in the most recent year, while liquidity ratios showed some weakening with stabilization toward the end. The company’s returns on equity and assets demonstrate volatility but remain relatively robust overall.

Net Sales Trend

Net sales have shown a consistent upward trend over the five-year period, increasing from $32,637 million in 2020 to $38,498 million in 2024. The growth was steady each year, reflecting gradual expansion in revenue generation.

Total Assets Trend

Total assets remained relatively stable between 2020 and 2023, beginning at $64,586 million in 2020 and slightly decreasing to $61,525 million in 2023. In 2024, a notable increase occurred, with total assets rising sharply to $75,196 million, representing a significant increase in asset base.

Reported Total Asset Turnover Ratio

The reported total asset turnover ratio improved from 0.51 in 2020 to a peak of 0.60 in 2023, indicating more efficient use of assets in generating sales during this period. However, in 2024, this ratio declined to 0.51, suggesting decreased asset efficiency coinciding with the increase in total assets.

Adjusted Net Sales and Adjusted Total Assets

Adjusted net sales closely mirror the net sales trend, increasing from $33,125 million in 2020 to $38,524 million in 2024. Adjusted total assets similarly reflect the pattern of total assets, remaining stable around $64 billion until 2023 before rising sharply to $75,272 million in 2024.

Adjusted Total Asset Turnover Ratio

This ratio follows a similar trajectory to the reported total asset turnover, increasing from 0.52 in 2020 to 0.59 in 2023, then declining to 0.51 in 2024. This pattern confirms the observation that asset turnover efficiency peaked in 2023 before easing in 2024.

Overall Insights

The steady growth in net sales indicates continual revenue development over the period. The fluctuation in total assets, particularly the sharp rise in 2024, suggests either significant asset acquisition or revaluation during that year. The rise and subsequent fall in asset turnover ratios imply that while asset utilization efficiency improved steadily through 2023, the increase in asset base in 2024 outpaced sales growth, resulting in lower turnover metrics. This could warrant further analysis of asset composition and utilization post-2023.

The analysis of the available annual financial data reveals several important trends related to liquidity and short-term financial stability.

Current Assets

Current assets show a general decline from 28,175 million US dollars at the end of 2020 to a low of 23,502 million US dollars at the end of 2023. However, there is a noticeable recovery in 2024, where current assets increase substantially to 27,908 million US dollars, nearly matching the 2020 level.

Current Liabilities

Current liabilities display a fluctuating pattern, rising gradually from 19,197 million US dollars in 2020 to a peak of 19,938 million US dollars in 2022, followed by a decline to 18,539 million in 2023. In 2024, current liabilities rise again sharply to 21,256 million US dollars, reaching the highest level observed in the period.

Reported Current Ratio

The reported current ratio declines progressively over the first three years from 1.47 in 2020 to 1.25 in 2022, indicating a possible weakening of liquidity. A slight improvement occurs in 2023 to 1.27, followed by a further modest increase to 1.31 in 2024. Despite the improvement, the ratio remains lower than the initial 2020 figure, signaling a somewhat reduced capacity to cover short-term obligations with current assets.

Adjusted Current Assets

Adjusted current assets follow a similar trend to the reported current assets, decreasing from 28,377 million US dollars in 2020 to 23,825 million in 2023, then recovering to 28,222 million in 2024. The adjustment narrows the asset base slightly compared to the unadjusted figures, but the overall pattern remains consistent.

Adjusted Current Liabilities

Adjusted current liabilities decrease from 15,481 million US dollars in 2020 to 14,579 million in 2023, suggesting a reduction in certain liabilities or adjustments that lower the total reported current liabilities. However, in 2024, adjusted current liabilities rise markedly to 17,363 million dollars, highlighting an increase similar in timing to that seen in the reported liabilities.

Adjusted Current Ratio

The adjusted current ratio declines from 1.83 in 2020 to 1.59 in 2022, showing a decrease in adjusted liquidity similar to the reported ratio's trend. It then stabilizes around 1.63 in both 2023 and 2024, suggesting a period of relative steadiness and slight improvement in adjusted liquidity after the dip experienced earlier.

Overall, the data indicates a liquidity contraction from 2020 through 2022, reflected in decreases in both current assets and current ratios, with a partial rebound starting in 2023 and continuing into 2024. The increasing current liabilities in 2024 may exert pressure on liquidity, despite the increased asset levels. Adjusted metrics consistently show higher liquidity ratios than the reported ones, which implies adjustments reduce the apparent short-term obligations and provide a more favorable view of liquidity. The company’s short-term financial health appears to have experienced some strain mid-period but shows signs of recovery and stabilization in the latest year analyzed.

The financial data demonstrates several notable trends and shifts over the five-year period analyzed.

Total Debt

Total debt decreased from 22,384 million US dollars in 2020 to 19,599 million in 2021, stabilizing slightly around 19,570 million in 2022 and then rising marginally to 20,443 million in 2023. A significant increase is observed in 2024, with total debt reaching 31,099 million. This indicates a considerable rise in borrowing or obligations in the latest year.

Total Honeywell Shareowners’ Equity

Shareowners' equity initially increased from 17,549 million in 2020 to 18,569 million in 2021, followed by a decline over the next two years to 16,697 million in 2022 and 15,856 million in 2023. In 2024, equity rebounded to 18,619 million, slightly surpassing the 2021 value. Overall, equity volatility is evident, with a dip mid-period and recovery at the end.

Reported Debt to Equity Ratio

This ratio decreased from 1.28 in 2020 to 1.06 in 2021, suggesting improved leverage or capital structure. However, it increased to 1.17 in 2022 and further to 1.29 in 2023, indicating a gradual rise in leverage. A sharp increase to 1.67 in 2024 reflects a substantial increase in debt relative to equity that year.

Adjusted Total Debt

Adjusted debt figures follow a similar pattern to total debt, starting at 23,212 million in 2020, declining to 20,631 million in 2021, and roughly stabilizing around 20,537 million in 2022 and 21,536 million in 2023 before a significant jump to 32,225 million in 2024. This suggests the increase in debt in 2024 is consistent even after adjustments.

Adjusted Total Shareowners’ Equity

Adjusted equity increased from 24,484 million in 2020 to 26,421 million in 2021, then declined gradually to 24,735 million in 2022 and 23,634 million in 2023, before rising to 26,142 million in 2024. This trend reflects similar fluctuations as reported equity but at higher absolute levels, showing stability and recovery in adjusted equity toward the end of the period.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio decreased from 0.95 in 2020 to 0.78 in 2021, indicating reduced leverage. The ratio increased gradually to 0.83 in 2022 and 0.91 in 2023, then rose significantly to 1.23 in 2024. Despite being lower than the reported ratio, the adjusted leverage also demonstrates a marked rise in 2024, reflecting increased financial risk.

In summary, the company experienced a period of deleveraging in 2021, with declines in both reported and adjusted debt and improved debt-to-equity ratios. However, from 2022 onward, there is a trend of increasing debt combined with fluctuating equity, culminating in a substantial increase in debt and leverage ratios in 2024. This suggests a shift towards higher financial leverage and potentially greater financial risk in the most recent year analyzed. The adjusted figures confirm these observations and provide a higher perspective on equity and debt levels. Overall, the capital structure shows volatility with a notable shift towards increased debt dependence in the latest period.

Total Debt

The total debt showed a declining trend from 22,384 million USD in 2020 to 19,570 million USD in 2022, indicating a reduction in the company's debt load during this period. However, in 2023, total debt increased slightly to 20,443 million USD and then surged significantly to 31,099 million USD in 2024, marking a substantial rise in debt obligations at the end of the period analyzed.

Total Capital

Total capital consistently decreased from 39,933 million USD in 2020 to 36,267 million USD in 2022, reflecting a contraction in the company's overall capital base. The figure then stabilized in 2023 at 36,299 million USD before experiencing a marked increase to 49,718 million USD in 2024. This reversal suggests an infusion of capital or revaluation of assets in the latest year.

Reported Debt to Capital Ratio

The reported debt to capital ratio declined from 0.56 in 2020 to a low of 0.51 in 2021, indicating improved leverage. The ratio increased again to 0.54 in 2022, rose further to 0.56 in 2023, and peaked at 0.63 in 2024. The upward trend in the last two years implies a rising debt load relative to capital, reflecting greater leverage and potentially increased financial risk.

Adjusted Total Debt

Adjusted total debt followed a similar trajectory to total debt, decreasing from 23,212 million USD in 2020 to 20,537 million USD in 2022, and then rising moderately to 21,536 million USD in 2023. A notable increase occurred in 2024, with adjusted total debt reaching 32,225 million USD. This indicates that when including adjustments, debt levels have increased more sharply in the most recent period.

Adjusted Total Capital

Adjusted total capital declined steadily from 47,696 million USD in 2020 to 45,272 million USD in 2022 and remained almost flat in 2023 at 45,170 million USD. In 2024, adjusted total capital significantly increased to 58,367 million USD, consistent with the trend in total capital and suggesting enhanced capital resources or asset revaluation in that year.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio showed an initial decline from 0.49 in 2020 to 0.44 in 2021, followed by a slight increase to 0.45 in 2022 and further to 0.48 in 2023. In 2024, the ratio rose noticeably to 0.55. This pattern indicates an overall increase in leverage, though adjusted figures depict somewhat lower leverage levels compared to reported metrics, underscoring the impact of accounting adjustments on leverage assessment.

The financial data over the five-year period exhibits several notable trends in both the asset base and equity structure, as well as in the associated leverage ratios.

Total Assets

The total assets remained relatively stable from 2020 to 2023, fluctuating slightly but trending downward overall from 64,586 million US dollars in 2020 to 61,525 million in 2023. However, a significant increase occurred in 2024, with total assets rising sharply to 75,196 million US dollars, representing a substantial expansion of the asset base.

Shareowners’ Equity (Reported)

Reported total shareowners’ equity showed a moderate increase in 2021 to 18,569 million US dollars but then declined over the next two years, reaching a low of 15,856 million in 2023. In 2024, equity recovered somewhat, increasing to 18,619 million US dollars, approaching the level observed in 2021.

Reported Financial Leverage

The reported financial leverage ratio decreased from 3.68 in 2020 to 3.47 in 2021, indicating a reduction in leverage. However, this ratio rose again over the subsequent years, climbing steadily to 4.04 in 2024. This suggests an increasing reliance on debt or liabilities relative to equity under the reported figures.

Adjusted Total Assets

The adjusted total assets closely mirror the trend observed in total assets, staying relatively constant around 64,000 million US dollars from 2020 to 2021, then gradually declining to approximately 61,456 million in 2023, followed by a significant increase to 75,272 million in 2024. This alignment suggests that the adjustments have little impact on the overall asset value trajectory.

Adjusted Shareowners’ Equity

Adjusted total shareowners’ equity shows a different pattern compared to reported equity. It increased from 24,484 million US dollars in 2020 to a peak of 26,421 million in 2021, then experienced declines through 2023, settling at 23,634 million. In 2024, there was a notable recovery to 26,142 million, which, similar to the asset increase, indicates stronger equity post-adjustment.

Adjusted Financial Leverage

The adjusted financial leverage ratio declined steadily from 2.62 in 2020 to 2.43 in 2021, suggesting decreased financial risk. Although it increased slightly thereafter to 2.88 in 2024, the growth in leverage is moderate compared to the reported figures. This reflects a more conservative leverage position when adjustments are taken into account.

Overall, the data reveal that the company’s asset base contracted somewhat during 2021-2023, followed by significant growth in 2024. Equity levels fluctuated but showed recovery in the final year. Reported leverage suggests an increasing use of debt financing, whereas adjusted metrics present a comparatively lower and more stable leverage profile, reflecting possibly different accounting treatments or risk assessments. The divergence between reported and adjusted figures underscores the importance of considering adjustments for a nuanced understanding of the financial position.

The financial data reveals several notable trends over the five-year period from 2020 to 2024.

Net Income Attributable to Honeywell

The net income exhibits variability with a generally positive trajectory. It increased from 4,779 million USD in 2020 to a peak of 5,658 million USD in 2023, followed by a moderate increase to 5,705 million USD in 2024. The data indicates resilience and growth in profitability despite fluctuations.

Net Sales

Net sales demonstrate a consistent upward trend throughout the period. The value rose steadily from 32,637 million USD in 2020 to 38,498 million USD in 2024. This continuous increase suggests steady revenue growth and expanding business operations or market presence.

Reported Net Profit Margin

The reported net profit margin fluctuates over the years. It started at 14.64% in 2020, peaked at 16.11% in 2021, then declined to 14.00% in 2022, recovered to 15.43% in 2023, and decreased slightly to 14.82% in 2024. These variations indicate some volatility in profitability relative to sales, with margins remaining within a moderate range but without a clear sustained trend upward or downward.

Adjusted Net Income

Adjusted net income follows a pattern similar to reported net income but with more pronounced fluctuations. It increased from 4,984 million USD in 2020 to a considerable peak of 6,230 million USD in 2021, then dropped significantly to 4,610 million USD in 2022, increased slightly to 4,909 million USD in 2023, and rose again to 6,034 million USD in 2024. The pronounced peaks and troughs suggest impacts from extraordinary items being adjusted out for a clearer view of core earnings.

Adjusted Net Sales

Adjusted net sales show a steady increase over time, moving from 33,125 million USD in 2020 up to 38,524 million USD in 2024. The rate of increase is consistent and matches the trend seen in reported net sales, underlining gradual growth in underlying sales performance.

Adjusted Net Profit Margin

The adjusted net profit margin presents notable fluctuations and wider variance compared to the reported margin. It rose significantly from 15.05% in 2020 to 18.01% in 2021, then declined sharply to 12.85% in 2022, followed by a mild recovery to 13.47% in 2023, and a stronger rebound to 15.66% in 2024. These swings highlight variability in operating efficiency or expense management once adjustments are applied, with improvement toward the end of the period.

Overall, the data reflects steady revenue growth paired with fluctuating profitability margins. The adjusted figures emphasize variability in recurring earnings and margins, potentially influenced by non-operational factors or one-time adjustments. The company appears to maintain a generally stable but somewhat volatile profitability profile relative to its increasing sales base over the observed timeframe.

The analysis of the financial data reveals several trends in the company’s profitability and equity management over the five-year period under review.

Net Income Attributable to Honeywell

The net income shows fluctuation throughout the years, starting at $4,779 million in 2020 and increasing to a peak of $5,658 million in 2023 before slightly rising to $5,705 million in 2024. There was a notable dip in 2022 when net income decreased to $4,966 million, indicating a temporary downturn followed by recovery.

Total Honeywell Shareowners’ Equity

This metric experienced a downward trend from 2021 to 2023, falling from $18,569 million in 2021 to a low of $15,856 million in 2023. However, in 2024, there was a significant increase to $18,619 million, recovering and slightly exceeding the 2021 level.

Reported Return on Equity (ROE)

Reported ROE remained relatively high and stable overall, showing an increasing trend from 27.23% in 2020 to 29.85% in 2021, with slight variation through 2022 (29.74%). It peaked notably at 35.68% in 2023, followed by a reduction to 30.64% in 2024. This indicates strong effectiveness in generating profit from equity, particularly in 2023.

Adjusted Net Income

Adjusted net income displays greater volatility compared to reported net income. It increased from $4,984 million in 2020 to $6,230 million in 2021, followed by a sharp decline to $4,610 million in 2022. It then partially recovered to $4,909 million in 2023 and increased significantly in 2024 to $6,034 million. These fluctuations suggest variability in underlying earnings when adjustments are considered.

Adjusted Total Shareowners’ Equity

This figure mirrors the downward trend observed in total shareowners’ equity between 2021 and 2023, decreasing from $26,421 million to $23,634 million, before rebounding sharply in 2024 to $26,142 million. This recovery reflects a restoration of the company’s adjusted capital base after a period of contraction.

Adjusted Return on Equity (ROE)

Adjusted ROE follows a pattern consistent with adjusted income and equity trends. After increasing from 20.36% in 2020 to 23.58% in 2021, it dropped to 18.64% in 2022, then rose modestly to 20.77% in 2023 and further to 23.08% in 2024. This suggests variability in adjusted profitability relative to equity, with 2022 marking a notable low point.

In summary, the company experienced a period of fluctuating profitability and equity base between 2020 and 2024. Net and adjusted income figures show variability with a dip in 2022 followed by recovery. The equity base contracted between 2021 and 2023 but recovered in 2024. Both reported and adjusted ROE exhibit strong profitability but also reflect the fluctuations in earnings and equity, notably demonstrating the impact of the 2022 downturn and the subsequent recovery in later years.

The analysis of the financial data reveals several noteworthy trends in key performance indicators over the five-year period.

Net Income Attributable to Honeywell

Net income demonstrated an overall upward trend, increasing from $4,779 million in 2020 to $5,705 million in 2024. However, there were fluctuations within this period, including a decline in 2022 to $4,966 million before rising again in subsequent years.

Total Assets

Total assets remained relatively stable from 2020 through 2023, fluctuating slightly between approximately $61,525 million and $64,586 million. A significant increase was observed in 2024, reaching $75,196 million, which represents a considerable expansion in asset base.

Reported Return on Assets (ROA)

The reported ROA followed a somewhat volatile pattern, starting at 7.4% in 2020 and peaking at 9.2% in 2023. Despite the peak, this metric declined to 7.59% in 2024, suggesting that the asset growth in 2024 did not proportionally translate into higher profitability based on reported figures.

Adjusted Net Income

Adjusted net income exhibited more variability compared to the reported net income. After an increase from $4,984 million in 2020 to $6,230 million in 2021, it declined sharply in 2022 to $4,610 million and remained lower in 2023 before recovering to $6,034 million in 2024. This suggests that adjustments made for non-recurring or other items had significant effects on net income figures.

Adjusted Total Assets

Adjusted total assets mirrored the trend observed in total assets, maintaining stability from 2020 to 2023 with values around $61,456 million to $64,158 million, then markedly increasing to $75,272 million in 2024. The parallel movement between reported and adjusted assets indicates consistency in asset reporting methodologies.

Adjusted Return on Assets (ROA)

Adjusted ROA demonstrated a rising trend in 2021, reaching 9.71%, followed by a decline to 7.41% in 2022. It then showed a moderate recovery to 8.02% by 2024. Unlike the reported ROA, the adjusted ROA did not exhibit as sharp a peak in 2023 but maintained a somewhat steadier level, indicating that adjusted profitability measures were less influenced by extraordinary items during that year.

In summary, while the company’s profitability as measured by net income showed growth with fluctuations, asset growth was particularly pronounced in 2024. The returns on assets, both reported and adjusted, reflected variability that may be attributed to fluctuations in net income and the increased asset base. The adjustments made to income and assets had material impacts on profitability ratios, highlighting the importance of considering both reported and adjusted data for comprehensive performance evaluation.