Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Income Statement
- Balance Sheet: Assets
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
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Profitability Ratios (Summary)
Lockheed Martin Corp., profitability ratios
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Gross Profit Margin
- The gross profit margin exhibited a declining trend over the analyzed period. Starting at 13.23% in 2020, it rose slightly to 13.52% in 2021, followed by a continuous decrease to 12.56% in 2022 and 12.55% in 2023. By 2024, the margin dropped significantly to 9.75%, indicating a reduction in the company's ability to retain revenue after accounting for the cost of goods sold.
- Operating Profit Margin
- The operating profit margin followed a similar pattern to the gross profit margin. It increased marginally from 13.22% in 2020 to 13.61% in 2021, then declined steadily to 12.65% in 2022 and 12.59% in 2023. The most notable decrease occurred in 2024, where the operating margin fell to 9.87%, suggesting rising operating expenses or reduced operational efficiency.
- Net Profit Margin
- The net profit margin showed more volatility throughout the period. Initially, it declined from 10.45% in 2020 to 9.42% in 2021 and continued to decrease to 8.69% in 2022. However, it rebounded to 10.24% in 2023, before dropping again to 7.51% in 2024. This variability indicates fluctuations in overall profitability and factors affecting the bottom line beyond operational performance.
- Return on Equity (ROE)
- Return on equity demonstrated considerable fluctuations over the five years. Starting exceptionally high at 113.6% in 2020, it dropped substantially to 57.62% in 2021 and slightly increased to 61.86% in 2022. ROE then rose again to 101.24% in 2023 before decreasing to 84.26% in 2024. Despite this volatility, ROE remained at levels indicative of substantial returns on shareholders' equity.
- Return on Assets (ROA)
- Return on assets showed a declining pattern with slight recovery before a final decrease. It started at 13.47% in 2020 and declined to 12.41% in 2021, then further to 10.84% in 2022. A recovery occurred in 2023 reaching 13.19%, but the ratio fell again to 9.59% in 2024. This trend suggests fluctuations in the efficiency with which the company utilized its assets to generate profit.
Return on Sales
Return on Investment
Gross Profit Margin
Lockheed Martin Corp., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data exhibits notable trends in sales and profitability over the five-year period ending December 31, 2024.
- Net Sales
- There is a consistent upward trend in net sales, increasing from $65,398 million in 2020 to $71,043 million in 2024. This denotes a growth trajectory with an overall increase of approximately 8.6% over the period.
- Gross Profit
- Gross profit figures fluctuate with an initial rise from $8,654 million in 2020 to a peak of $9,061 million in 2021, followed by a decline reaching $6,930 million in 2024. This indicates a reduction of about 23.5% from the 2021 peak to 2024, suggesting increasing cost pressures or changes in product mix affecting profitability.
- Gross Profit Margin
- The gross profit margin percentage shows a declining trend over the period. Starting at 13.23% in 2020, it peaks slightly at 13.52% in 2021 but then decreases steadily to 9.75% by 2024. This deterioration in margin percentage confirms that the company is experiencing lower profitability relative to its sales, potentially due to rising costs, pricing challenges, or competitive pressures.
Overall, while the company is achieving higher sales levels, the diminishing gross profit and contracting gross margins highlight challenges in maintaining profit efficiency and cost management. This pattern points to the need for strategic focus on cost control and margin enhancement to sustain financial health.
Operating Profit Margin
Lockheed Martin Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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. | ||||||
| RTX Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Operating Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Operating profit margin = 100 × Operating profit ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Profit
- The operating profit showed an initial increase from 8,644 million US dollars in 2020 to a peak of 9,123 million in 2021. However, following this peak, there was a decline, dropping to 8,348 million in 2022 and remaining relatively stable through 2023 at 8,507 million. The year 2024 saw a more pronounced decrease to 7,013 million, indicating a downward trend in operating profitability in the most recent period.
- Net Sales
- Net sales exhibited a generally increasing trend over the observed years. Starting at 65,398 million US dollars in 2020, there was steady growth to 67,044 million in 2021. Although there was a slight decline to 65,984 million in 2022, sales rebounded and continued to rise to 67,571 million in 2023 and further to 71,043 million in 2024. This indicates an overall expansion in sales volume or price over the five-year span, with minor fluctuations.
- Operating Profit Margin
- The operating profit margin demonstrated a declining trend over the period. It increased slightly from 13.22% in 2020 to 13.61% in 2021, then experienced a progressive decrease to 12.65% in 2022 and remained nearly stable at 12.59% in 2023. In 2024, there was a significant drop to 9.87%. This reduction in margin reflects a decrease in profitability relative to net sales, suggesting potential increases in costs or pricing pressures despite growing sales figures.
- Overall Analysis
- While net sales generally increased over the observed period, operating profit did not follow the same positive trajectory, especially notable in the decline during 2024. The decreasing operating profit margin corroborates this by highlighting diminishing efficiency or rising operational costs. These trends suggest that the company's revenue growth has not translated into proportionate profit growth, potentially indicating challenges in cost control or market conditions affecting margins adversely in recent years.
Net Profit Margin
Lockheed Martin Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Net Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Net profit margin = 100 × Net earnings ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings
- The net earnings display a fluctuating trend over the five-year period. Starting at 6,833 million US dollars in 2020, there is a decline in 2021 and 2022 to 6,315 million and 5,732 million respectively. However, earnings recover to 6,920 million in 2023 before dropping again to 5,336 million in 2024. This pattern suggests volatility in profitability, with a notable decrease by the final year reported.
- Net Sales
- Net sales generally exhibit an upward trend during the period analyzed. There is a progressive increase from 65,398 million US dollars in 2020 to 67,044 million in 2021, followed by a slight dip to 65,984 million in 2022. After this minor decrease, sales rise consistently to 67,571 million in 2023 and further to 71,043 million in 2024. Overall, the sales figures indicate growth despite minor fluctuations.
- Net Profit Margin
- The net profit margin shows a declining trend with some recovery observed in intermediate years. The margin falls from 10.45% in 2020 to 9.42% in 2021 and further down to 8.69% in 2022. An improvement is noticed in 2023 with a rise to 10.24%, but this is followed by a significant drop to 7.51% in 2024. This volatility in margin percentage, coupled with the earnings data, suggests that despite rising sales, profitability efficiency has decreased overall by the end of the period.
Return on Equity (ROE)
Lockheed Martin Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
| ROE, Sector | ||||||
| Capital Goods | ||||||
| ROE, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROE = 100 × Net earnings ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The data presents key financial metrics over a five-year period, revealing various trends in profitability and equity structure.
- Net Earnings
- Net earnings display a fluctuating pattern. They declined consistently from 6,833 million US dollars in 2020 to 5,732 million in 2022, followed by a notable rebound to 6,920 million in 2023 before decreasing again to 5,336 million in 2024. This volatility may indicate varying operational performance or external factors influencing profitability.
- Stockholders’ Equity
- Stockholders' equity rose sharply from 6,015 million US dollars in 2020 to 10,959 million in 2021, representing significant capital accumulation or retained earnings reinvestment. However, it subsequently declined over the next three years to 6,333 million by 2024. This downward trend after 2021 could suggest dividend distributions, share buybacks, or other equity-reducing activities.
- Return on Equity (ROE)
- ROE, a measure of profitability relative to shareholders' equity, also demonstrated fluctuations. After an exceptionally high 113.6% in 2020, it decreased sharply to 57.62% in 2021 and remained in the 60% range in 2022. It then surged to 101.24% in 2023 before falling to 84.26% in 2024. The high ROE values throughout the period suggest efficient use of equity to generate profits, although the significant variations indicate changes in profitability relative to equity base, possibly linked to fluctuations in equity levels.
Overall, the financial indicators show a period of significant equity growth followed by reduction, alongside volatile net earnings with partial recoveries. The ROE remains elevated but fluctuates considerably due to these underlying changes in earnings and equity. These patterns may require further investigation into operational factors, capital management decisions, and external economic influences to fully understand the causes and implications.
Return on Assets (ROA)
Lockheed Martin Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net earnings | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| RTX Corp. | ||||||
| ROA, Sector | ||||||
| Capital Goods | ||||||
| ROA, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
ROA = 100 × Net earnings ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The financial data reveals several key trends related to profitability and asset management over the five-year period.
- Net Earnings
- Net earnings demonstrate a fluctuating pattern with an initial decline from 6833 million US dollars in 2020 to 5732 million in 2022, followed by a recovery to 6920 million in 2023, and then a subsequent decrease to 5336 million in 2024. This indicates some variability in profitability, possibly due to changing market conditions or operational factors.
- Total Assets
- Total assets show a generally upward trend, increasing from 50710 million US dollars in 2020 to 55617 million in 2024, despite minor fluctuations. This growth suggests ongoing investment or asset acquisition, reflecting expansion or reinvestment strategies over the period.
- Return on Assets (ROA)
- ROA follows a declining trend overall, beginning at 13.47% in 2020 and dropping to 9.59% in 2024. The ratio dips steadily until 2022, improves somewhat in 2023, and then declines again in 2024. This pattern indicates a decreasing efficiency in utilizing assets to generate earnings, which might be driven by the combination of fluctuating net earnings and the increasing asset base.
Overall, the company experienced growth in asset size but with inconsistent profitability and a lowering efficiency in asset utilization over the analyzed timeframe. The recent decline in both net earnings and ROA in 2024 warrants attention to potential underlying operational or market challenges.