ONEOK Inc. (NYSE:OKE)

Return on Assets (ROA)

The Return on Assets showed a decline from 6.32% in 2018 to 2.66% in 2020, indicating reduced efficiency in asset utilization during this period. However, a recovery is observed in subsequent years, with ROA increasing to 6.35% in 2021 and further to 7.06% in 2022, surpassing the initial 2018 level. This suggests improved asset profitability and operational performance in the last two years.

Financial Leverage

Financial leverage rose steadily from 2.77 times in 2018 to a peak of 3.93 times in 2021, reflecting an increased reliance on debt financing or liabilities relative to equity. In 2022, there is a slight reduction to 3.75 times, which may indicate a cautious approach to leverage or debt management after reaching the peak.

Return on Equity (ROE)

Return on Equity exhibited significant volatility across the years. Starting at 17.5% in 2018, it increased to 20.54% in 2019 before sharply falling to 10.14% in 2020. This was followed by a strong rebound to 24.93% in 2021, reaching the highest level in 2022 at 26.52%. The pattern reflects fluctuations in profitability and capital efficiency, with notable recovery and growth in the latter years.

Overall, the data reveals a period of contraction in profitability metrics around 2020, likely influenced by external or operational challenges, followed by a robust recovery in asset efficiency and equity returns. The increasing financial leverage up to 2021 suggests a strategic use of debt, with a slight moderation thereafter. The positive trends in ROA and ROE in recent years highlight improved operational and financial performance.

Net Profit Margin

The net profit margin exhibited fluctuations over the five-year period. It increased from 9.15% in 2018 to a peak of 12.58% in 2019, followed by a significant decline to 7.17% in 2020. After this drop, the margin showed a partial recovery to 9.07% in 2021, then decreased slightly to 7.69% in 2022. This pattern suggests variability in profitability, with no sustained upward or downward trend over the period.

Asset Turnover

Asset turnover displayed a declining trend from 0.69 in 2018 to its lowest point of 0.37 in 2020. Subsequently, there was a strong recovery to 0.7 in 2021 and continued improvement to 0.92 in 2022. This indicates that the efficiency in using assets to generate sales weakened initially but improved markedly in the latter two years.

Financial Leverage

Financial leverage increased steadily from 2.77 in 2018 to a peak of 3.93 in 2021, then slightly decreased to 3.75 in 2022. The rise in leverage suggests an increasing reliance on debt financing or debt-like liabilities over the period, with a minor reduction towards the end.

Return on Equity (ROE)

Return on equity showed considerable volatility. After an increase from 17.5% in 2018 to 20.54% in 2019, it sharply declined to 10.14% in 2020. Subsequently, ROE recovered strongly to 24.93% in 2021 and increased further to 26.52% in 2022. The steep decline in 2020 followed by a robust recovery suggests a period of challenges succeeded by improved profitability and efficient equity utilization.

Tax Burden

The tax burden remained relatively stable over the five-year period, fluctuating slightly between 0.76 and 0.77, indicating consistent tax expense relative to earnings before tax.

Interest Burden

The interest burden experienced a notable decline in 2020 to 0.53 from around 0.76-0.77 in prior years but then recovered to 0.73 in 2021 and 0.77 in 2022. This suggests that interest expense impacted operating income significantly in 2020 but improved thereafter.

EBIT Margin

The EBIT margin peaked in 2019 at 21.08% but then declined steadily, reaching a low of 13.07% by the end of 2022. This downward trend indicates a reduction in operational profitability despite some recovery after 2020.

Asset Turnover

Asset turnover diminished from 0.69 in 2018 to a low of 0.37 in 2020, signifying decreased efficiency in using assets to generate revenue during that year. However, the ratio rebounded sharply to 0.92 in 2022, reflecting improved asset utilization.

Financial Leverage

Financial leverage increased consistently from 2.77 in 2018 to a peak of 3.93 in 2021, before slightly declining to 3.75 in 2022. This pattern indicates growing reliance on debt financing over the period, with a modest reduction in leverage most recently.

Return on Equity (ROE)

ROE showed volatility, rising from 17.5% in 2018 to 20.54% in 2019, then plunging to 10.14% in 2020. Afterward, it rebounded strongly to 24.93% in 2021 and further to 26.52% in 2022, indicating the company’s ability to generate higher returns on shareholder equity in recent years despite earlier setbacks.

Net Profit Margin

The net profit margin displayed fluctuations over the five-year period. Beginning at 9.15% in 2018, it increased to a peak of 12.58% in 2019. However, the margin declined significantly to 7.17% in 2020 before partially recovering to 9.07% in 2021. In 2022, there was a slight decrease to 7.69%. This pattern indicates variability in profitability, with a notable dip in 2020 potentially reflecting external or operational challenges during that year.

Asset Turnover

Asset turnover showed a downward trend from 0.69 in 2018 to a low of 0.37 in 2020, suggesting reduced efficiency in using assets to generate revenue during this period. Subsequently, there was a marked improvement, rising to 0.7 in 2021 and further increasing to 0.92 in 2022, indicating enhanced operational efficiency and asset utilization in the latter years.

Return on Assets (ROA)

The return on assets started at 6.32% in 2018 and experienced a slight decrease to 5.86% in 2019. A significant decline occurred in 2020, dropping to 2.66%, reflecting weakened asset profitability. However, the ROA improved in the following years, reaching 6.35% in 2021 and further increasing to 7.06% in 2022, demonstrating a recovery and strengthening in the company's ability to generate profit from its assets.

Overall Analysis

The data reveals a period of operational challenges around 2020, indicated by declines in all three key metrics: net profit margin, asset turnover, and return on assets. Following this period, the company showed signs of recovery and improvement, especially in asset efficiency and profitability metrics by 2022. The return towards higher asset turnover and ROA values suggests effective management actions to enhance asset utilization and profitability post-2020. Despite improvements, profitability margins in 2022 remain below the 2019 peak, indicating potential areas for further financial performance enhancement.

Tax Burden

The tax burden ratio remained relatively stable throughout the period, fluctuating slightly between 0.76 and 0.77. This indicates a consistent tax impact on earnings before taxes over the years analyzed.

Interest Burden

The interest burden ratio showed notable variation, beginning at 0.76 in 2018 and 2019, then declining sharply to 0.53 in 2020, before recovering to 0.73 in 2021 and rising again to 0.77 in 2022. This suggests a temporary increase in interest expenses or financial leverage in 2020, followed by improvement in subsequent years.

EBIT Margin

The EBIT margin peaked at 21.08% in 2019, up from 15.76% in 2018. Afterwards, there was a steady decline to 17.74% in 2020, 16.43% in 2021, and further down to 13.07% in 2022. This downward trend indicates a reduction in operational profitability over the last three years.

Asset Turnover

Asset turnover dropped significantly from 0.69 in 2018 to 0.47 in 2019, then further to 0.37 in 2020. However, it rebounded strongly to 0.70 in 2021 and continued to improve to 0.92 by 2022. The initial decline suggests less efficient use of assets, followed by enhanced efficiency in asset utilization in the latter period.

Return on Assets (ROA)

Return on assets decreased from 6.32% in 2018 to 5.86% in 2019, then sharply declined to 2.66% in 2020. Subsequently, ROA improved to 6.35% in 2021 and further to 7.06% in 2022. This pattern reflects a significant dip in profitability in 2020 with a recovery and growth in returns on assets in the following years.

Tax Burden

The tax burden ratio remained remarkably stable over the analyzed period, fluctuating minimally around 0.76 to 0.77. This consistency indicates a steady effective tax rate with little variation from year to year.

Interest Burden

The interest burden ratio showed variability during the period. Starting at 0.76 in 2018 and 0.77 in 2019, the ratio declined sharply to 0.53 in 2020, indicating a significant increase in interest expenses or lower operating income before interest. The ratio partially recovered to 0.73 in 2021 and returned to 0.77 in 2022, suggesting improved interest management or changes in the financial structure over the last two years.

EBIT Margin

The EBIT margin experienced fluctuations with a peak of 21.08% in 2019, followed by a decline to 17.74% in 2020. Afterward, the margin further decreased gradually to 16.43% in 2021 and reached the lowest point of 13.07% in 2022. This trend denotes a gradual erosion of operating profitability over the period assessed, particularly pronounced in the final year.

Net Profit Margin

Net profit margin showed a similar pattern to EBIT margin but with greater variability. After rising to 12.58% in 2019, it declined sharply to 7.17% in 2020, then partially recovered to 9.07% in 2021, before again decreasing to 7.69% in 2022. The fluctuations suggest external or internal factors affecting profitability beyond operational efficiency, possibly including non-operating expenses or tax impacts despite the stable tax burden ratio.