Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Return on Assets (ROA) since 2005
- Debt to Equity since 2005
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Profitability Ratios (Summary)
ONEOK Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
The analysis of the quarterly financial ratios over the observed periods reveals distinct trends and fluctuations in profitability and efficiency metrics.
- Gross Profit Margin
- The gross profit margin showed an overall increasing trend from the first quarter of 2019 through the end of 2020, rising from approximately 26.57% to a peak near 40.18%. This indicates improvements in production efficiency or pricing power during this time. However, from 2021 onwards, the margin declined significantly, reaching a low point around 19.49% in the third quarter of 2022, before recovering slightly to 24.5% by mid-2023. This dip could suggest increased cost pressures or competitive pricing challenges in the latter years.
- Operating Profit Margin
- The operating profit margin displayed more variability. It peaked at about 21.97% at the start of 2021, following a drop during 2020 to approximately 14.31%-15.94%. Post-2021, it fell again gradually, reaching its lowest at 11.87% in late 2022 but then experienced a steady increase, rising to 19.22% by mid-2023. This trend implies operational challenges during 2020 and 2022, with subsequent improvements likely due to operational efficiencies or cost control measures.
- Net Profit Margin
- The net profit margin mirrored the general patterns observed in operating profit margin but with less volatility. It declined sharply in 2020, down to around 7.13%, before rebounding in early 2021 to near 11.91%. This was followed by another decrease over 2021 and 2022 to lows near 7.1%, and then a recovery to 12.68% in mid-2023. This reflects the net impact of not only operational cost changes but also non-operational factors such as financing costs and taxes.
- Return on Equity (ROE)
- The return on equity experienced significant fluctuations. It dropped markedly in 2020, reaching a low around 9.96%, likely impacted by decreased profitability during that period. However, from 2021 onwards, ROE improved sharply and consistently, moving from approximately 18.71% at the start of 2021 to over 33% by mid-2023. This strong recovery and growth indicate enhanced profitability relative to shareholder equity and possibly improved capital management.
- Return on Assets (ROA)
- The return on assets followed a somewhat similar trajectory to ROE but at a more subdued scale. It decreased substantially during 2020, falling to around 2.7%, reflecting lower asset efficiency or profitability. Since early 2021, there has been a steady upward trend, with ROA rising to over 10% by mid-2023. This suggests better overall asset utilization and operational performance in recent periods.
In summary, the financial ratios reveal that the company faced considerable profitability and efficiency challenges during 2020, likely influenced by adverse external conditions. Despite this, operational improvements and recovery efforts have been effective from 2021 onwards, resulting in a pronounced rebound in profit margins, returns on equity, and assets by mid-2023. Continuing focus on cost management and asset utilization appears to be key drivers behind recent improvements.
Return on Sales
Return on Investment
Gross Profit Margin
ONEOK Inc., gross profit margin calculation (quarterly data)
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q2 2023 Calculation
Gross profit margin = 100
× (Net marginQ2 2023
+ Net marginQ1 2023
+ Net marginQ4 2022
+ Net marginQ3 2022)
÷ (RevenuesQ2 2023
+ RevenuesQ1 2023
+ RevenuesQ4 2022
+ RevenuesQ3 2022)
= 100 × ( + + + )
÷ ( + + + )
=
- Net Margin
- The net margin exhibited a generally upward trend over the analyzed periods. Initial values fluctuated around the 800-900 million USD range during 2019 and early 2020, before increasing steadily through 2021 and 2022. By the first half of 2023, net margin reached its highest points, exceeding 1,200 million USD in the most recent quarter. This suggests improved profitability, despite some mid-period volatility.
- Revenues
- Revenues showed notable volatility across the periods. Starting near 2,780 million USD in early 2019, they experienced a decline throughout 2019 and the first half of 2020, reaching a low near 1,660 million USD in mid-2020. From the latter half of 2020, revenues increased significantly, peaking above 5,900 million USD in mid-2022. After this peak, a declining trend was observed, with revenues falling to approximately 3,700 million USD by mid-2023. The pattern reflects sensitivity to external factors impacting sales volume or prices.
- Gross Profit Margin
- The gross profit margin showed a clear upward trajectory from early 2019 through late 2020, rising from about 26.6% to over 40%. However, starting in 2021, there was a consistent decline in gross margin percentage, bottoming near 19.5% in late 2022. A slight recovery is evident in early 2023, with margins rebounding to above 24%. This suggests initial improvements in cost efficiency or pricing power, followed by increasing cost pressures or changes in revenue mix adversely affecting gross profitability.
- Overall Analysis
- The data reveals a complex interaction between revenues, gross profit margin, and net margin. Despite notable revenue fluctuations, net margin exhibited growth, implying effective cost management or other income improvements. The gross profit margin trend highlights significant margin compression post-2020, potentially due to rising costs or shifts in sales composition. The partial rebound in gross margin in 2023 may indicate initial success in addressing these challenges. Monitoring cost control and pricing strategies should remain a focus to sustain profitability amid revenue volatility.
Operating Profit Margin
ONEOK Inc., operating profit margin calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Operating income (loss) | ||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Operating profit margin1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q2 2023 Calculation
Operating profit margin = 100
× (Operating income (loss)Q2 2023
+ Operating income (loss)Q1 2023
+ Operating income (loss)Q4 2022
+ Operating income (loss)Q3 2022)
÷ (RevenuesQ2 2023
+ RevenuesQ1 2023
+ RevenuesQ4 2022
+ RevenuesQ3 2022)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Operating Income (Loss)
- The operating income demonstrated a notable decline at the beginning of 2020, reaching a loss in the first quarter of that year. Following this dip, a recovery trend is evident, with operating income increasing steadily through 2020 and maintaining positive levels across subsequent periods. The data highlights a substantial surge in operating income in the first quarter of 2023, significantly higher than in previous quarters, indicating a strong operational performance at that time.
- Revenues
- Revenues display a declining trend from early 2019 into mid-2020, reaching a low point in the second quarter of 2020. Following this nadir, revenues recovered and grew consistently through 2021 and into early 2022, peaking in the first half of 2022. After this peak, revenues decreased again in the latter half of 2022 and into the first half of 2023, suggesting some volatility and sensitivity to external factors affecting sales volumes or pricing.
- Operating Profit Margin
- The operating profit margin experienced fluctuation over the observed periods. Margins were relatively stable and gradually improving through 2019, before a dip occurred in early 2020, coinciding with the period of operational loss. Margins strengthened significantly during 2021, peaking in the first quarter of 2021, but then displayed a consistent downward trend through most of 2022. An uptick in margin re-emerged in early 2023, indicating improved profitability relative to revenues in recent quarters.
Net Profit Margin
ONEOK Inc., net profit margin calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income (loss) attributable to ONEOK | ||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| Net profit margin1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q2 2023 Calculation
Net profit margin = 100
× (Net income (loss) attributable to ONEOKQ2 2023
+ Net income (loss) attributable to ONEOKQ1 2023
+ Net income (loss) attributable to ONEOKQ4 2022
+ Net income (loss) attributable to ONEOKQ3 2022)
÷ (RevenuesQ2 2023
+ RevenuesQ1 2023
+ RevenuesQ4 2022
+ RevenuesQ3 2022)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to ONEOK
- The net income demonstrated significant volatility over the analyzed periods. In 2019, net income was relatively stable, ranging approximately between 309 and 337 million USD per quarter. The first quarter of 2020 recorded a loss of 142 million USD, indicating a sharp decline compared to previous quarters. Subsequently, the net income recovered and gradually increased through 2020 and 2021. The upward trend continued into 2022 and early 2023, peaking at 1,049 million USD in the first quarter of 2023 before declining to 468 million USD in the second quarter of 2023.
- Revenues
- Revenues declined steadily from the first quarter of 2019 through the second quarter of 2020, with the lowest point recorded at 1,661 million USD in the second quarter of 2020. Starting the third quarter of 2020, revenues rose significantly, reaching a peak of 5,997 million USD in the second quarter of 2022. Following this peak, revenues exhibited a downward movement, decreasing through the end of the observed period, finishing at 3,732 million USD in the second quarter of 2023.
- Net Profit Margin
- The net profit margin fluctuated in line with net income and revenue trends. During 2019, the margin improved from 9.98% to 12.58%. A notable decline occurred in 2020, dropping to a low of 7.13%, coincident with the loss and revenue decline seen in early 2020. Profit margins partially recovered in 2021 but generally stayed below 12%, fluctuating around 7% to 9%. By the first half of 2023, the margin increased again, reaching 12.68%, suggesting improved profitability relative to revenues despite the recent revenue decline.
- Summary of Trends
- The data indicates the company experienced a challenging period in early 2020, with negative net income and reduced revenues, possibly due to external economic pressures. However, the subsequent recovery phase was marked by strong revenue growth and an eventual increase in profitability, evidenced by rising net income and profit margins through 2021 and 2022. The substantial spike in net income in early 2023 was accompanied by a decline in revenues, which implies potential improvements in operational efficiency or other non-revenue related income sources. Overall, the financial metrics portray a company that rebounded from 2020 lows, achieving strong profitability despite some recent decreases in revenue.
Return on Equity (ROE)
ONEOK Inc., ROE calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income (loss) attributable to ONEOK | ||||||||||||||||||||||||
| Total ONEOK shareholders’ equity | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| ROE1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| ROE, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q2 2023 Calculation
ROE = 100
× (Net income (loss) attributable to ONEOKQ2 2023
+ Net income (loss) attributable to ONEOKQ1 2023
+ Net income (loss) attributable to ONEOKQ4 2022
+ Net income (loss) attributable to ONEOKQ3 2022)
÷ Total ONEOK shareholders’ equity
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Trends
- The net income exhibited volatility during the period, with a notable loss in the first quarter of 2020, reaching a negative value of -142 million US dollars. Prior to this loss, net income values ranged from approximately 309 to 337 million US dollars. Following the loss, net income gradually recovered and demonstrated a consistent upward trend, peaking at 1,049 million US dollars in the first quarter of 2023 before dropping to 468 million US dollars in the subsequent quarter. This indicates a significant rebound and improved profitability after the 2020 downturn.
- Total Shareholders’ Equity Trends
- Total shareholders’ equity showed a general stability with mild fluctuations. The equity decreased from approximately 6,442 million US dollars in the first quarter of 2019 to 5,561 million US dollars in the first quarter of 2020, corresponding with the period of net income loss. Thereafter, equity remained reasonably stable around the 6,000 million US dollars mark and demonstrated a steady increase starting in late 2021 through the first half of 2023, reaching around 7,218 million US dollars. This trend suggests steady capital base maintenance and gradual growth following the early 2020 decline.
- Return on Equity (ROE) Analysis
- ROE experienced a decline in the first half of 2020, dropping from over 20% in early 2019 to around 10% mid-2020, reflecting the impact of the net income downturn. Subsequently, ROE showed consistent improvement throughout the following years, progressing from approximately 18.7% in the first quarter of 2021 to surpass 33% by the first half of 2023. This upward trajectory highlights a marked enhancement in the company’s efficiency in generating returns from shareholders' equity following the initial disruption.
- Overall Financial Performance
- The financial data reflects a significant disruption around the start of 2020, likely associated with broader economic challenges, evidenced by reduced profitability, lower equity, and diminished ROE. Post this period, the company displayed robust recovery characterized by improved net income, reinforcing equity growth, and enhanced return on equity ratios, indicating strengthened operational performance and capital utilization efficiency through 2023.
Return on Assets (ROA)
ONEOK Inc., ROA calculation (quarterly data)
| Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||
| Net income (loss) attributable to ONEOK | ||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||
| ROA1 | ||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||
| ROA, Competitors2 | ||||||||||||||||||||||||
| Chevron Corp. | ||||||||||||||||||||||||
| ConocoPhillips | ||||||||||||||||||||||||
| Exxon Mobil Corp. | ||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).
1 Q2 2023 Calculation
ROA = 100
× (Net income (loss) attributable to ONEOKQ2 2023
+ Net income (loss) attributable to ONEOKQ1 2023
+ Net income (loss) attributable to ONEOKQ4 2022
+ Net income (loss) attributable to ONEOKQ3 2022)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to ONEOK
- The net income demonstrated considerable fluctuation over the observed periods. Initially, from early 2019 through 2019 year-end, net income values hovered around the low 300 million US dollars range. However, a notable downturn occurred in the first quarter of 2020, reflecting a loss of 142 million US dollars. Subsequently, the company recovered, with net income steadily increasing through 2020 and 2021, returning to and maintaining levels above 300 million US dollars each quarter. In 2022, net income displayed an upward trend, surpassing 400 million US dollars in several quarters. The most significant increase was observed in the first quarter of 2023, where net income more than doubled compared to previous quarters, reaching 1,049 million US dollars, before declining again in the second quarter of 2023 but remaining considerably elevated compared to prior periods.
- Total Assets
- Total assets showed a general upward trend over the entire timeframe. From just below 19 billion US dollars at the beginning of 2019, the asset base increased steadily, peaking near 24.5 billion US dollars in mid-2022. A slight decline followed towards the end of 2022 and into the first half of 2023, yet total assets remained close to the historical peak levels. This indicates a consistent expansion or maintenance of the company's asset base over the five-year period.
- Return on Assets (ROA)
- ROA exhibited a decline beginning in 2019, dropping from around 6.5% early in 2019 to below 3% during mid-2020, coinciding with the period of net income loss. Thereafter, a recovery phase was apparent, with ROA gradually increasing throughout late 2020 and gaining momentum through 2021 and 2022. By early 2023, ROA reached its highest observed levels, exceeding 9%, reflecting improved profitability relative to asset base. The trend suggests enhanced operational efficiency and/or improved market conditions driving higher earnings on existing assets.
- Overall Analysis
- The financial data signals a resilient performance pattern characterized by a sharp earnings decline early in 2020, likely linked to external challenges affecting profitability. Following this, a robust recovery phase is evident, marked by improving net income and ROA despite relatively stable total assets. The sharp spike in net income in early 2023 is particularly notable and suggests a significantly positive event or operational improvement during that period. Total assets have matured steadily, supporting sustained earnings growth and rising returns on assets, underscoring effective asset utilization and operational management.