RTX Corp. (NYSE:RTX)

The analysis of the quarterly financial ratios over the observed periods reveals noteworthy trends in the company's performance and financial structure.

Return on Assets (ROA)

The ROA shows a significant improvement from a negative value of -1.67% in the first quarter of 2021 to generally positive and increasing values in subsequent quarters, stabilizing above 2% from mid-2021 through late 2023. There is a brief decline toward the end of 2023 and the first quarter of 2024, with ROA dropping near 1.4%, but it subsequently recovers and rises to 3.91% by the last quarter of 2025. This pattern indicates a consistent ability to generate returns from assets, with some fluctuation but an overall upward trajectory toward increased operational efficiency.

Financial Leverage

Financial leverage ratios remain relatively stable, fluctuating narrowly between 2.19 and 2.73 across all quarters, with a slight upward trend starting around late 2023 that peaks near 2.73 in 2024 before declining slightly toward 2.61 in the final recorded period. This suggests the company has maintained a consistent use of debt relative to equity, with no major structural changes in its capital composition, preserving moderate leverage.

Return on Equity (ROE)

ROE shows a strong positive trend from a negative starting point of -3.74% in early 2021 to a peak of over 10% by the end of 2025. Throughout the timeline, ROE experiences steady growth with incremental increases punctuated by minor fluctuations, notably a dip during late 2023 and early 2024, paralleling the ROA trend. The steady increase demonstrates improving profitability and effective use of shareholders’ equity, suggesting enhanced value generation for investors.

In summary, the financial analysis reveals progressive improvements in profitability metrics (ROA and ROE), reflecting better asset utilization and equity returns over the observed period. The stable financial leverage indicates prudent debt management, avoiding excessive risk from increased indebtedness. Short-term fluctuations are present but do not detract from the overarching positive trends in financial performance and operational effectiveness.

Net Profit Margin

The net profit margin exhibited a significant turnaround from a negative value of -4.44% in the first quarter of 2021 to a general positive and improving trend through 2021 and into early 2022, reaching a peak of 7.75% in the fourth quarter of 2022. Following this peak, there was a notable decline during 2023, with margins falling to around 4.64% in the fourth quarter. However, the margin rebounded again in 2024 and into 2025, climbing steadily to approximately 7.67% by the third quarter of 2025. This indicates cyclical fluctuations but an overall improvement in profitability.

Asset Turnover

Asset turnover showed a consistent and gradual increase over the observed period. Starting at 0.38 in the first quarter of 2021, the ratio rose steadily with minor variations, reaching around 0.51 by the third quarter of 2025. This reflects progressive improvement in the efficiency with which the company is using its assets to generate sales.

Financial Leverage

Financial leverage remained relatively stable but with periods of moderate variation. It began at 2.24 in early 2021 and hovered in the range of approximately 2.19 to 2.33 through 2022. Notably, there was a marked increase to approximately 2.71 in early 2023, followed by fluctuations around 2.65 to 2.73 during 2023 and 2024. It declined slightly towards the later periods, ending near 2.61 by the third quarter of 2025. These levels suggest a moderate but carefully managed use of debt relative to equity.

Return on Equity (ROE)

Return on equity mirrored the overall improvement seen in profitability measures. It moved from a negative position of -3.74% in the first quarter of 2021 to strong positive growth, peaking at 7.94% in the second quarter of 2025. The trend demonstrates steadily improving effectiveness in generating shareholder returns from equity, with a brief decline during late 2022 and early 2023 before recovering strongly in subsequent quarters. The highest ROE value recorded, exceeding 10% in the third quarter of 2025, indicates enhanced operational performance and efficient use of equity capital.

The analysis of the quarterly financial ratios over the period from March 2021 to September 2025 reveals several notable trends in profitability and operational efficiency.

Net Profit Margin (%)

The net profit margin shows a significant improvement over the analyzed timeframe. Initially, the margin was negative at -4.44% in March 2021, indicating losses. However, it recovered sharply by mid-2021, reaching positive values above 3.5%, and continued a general upward trend through 2022 and early 2023, peaking near 8.08%. Following this peak, the margin exhibited some fluctuations but remained positive, stabilizing between approximately 3.12% and 7.67% in subsequent years, with a slight upward bias toward the end of the period. This progression suggests improving profitability and greater control over costs relative to revenue.

Asset Turnover (ratio)

The asset turnover ratio, indicative of how efficiently the company uses its assets to generate sales, has steadily increased from 0.38 in March 2021 to 0.51 by September 2025. The ratio demonstrates gradual improvement with minor fluctuations, reflecting enhanced operational efficiency and better utilization of company assets over time.

Return on Assets (ROA) (%)

Return on assets shows a recovery from a negative starting point (-1.67% in March 2021) to a generally positive trajectory during the entire period under review. ROA rises steadily, crossing the 3% mark several times throughout the period, though it experiences some volatility particularly around late 2023 where it momentarily dips to approximately 1.4%. By late 2025, ROA reaches a higher level near 3.9%, evidencing improved profitability relative to total assets and reflecting the combined effects of increasing net profit margins and enhanced asset turnover.

Overall, the data signifies a positive shift in financial health, with the company progressively achieving higher profitability and better efficiency in asset utilization. The upward trends in net profit margin and asset turnover are particularly notable, supporting the increase in return on assets. Some periods exhibit volatility, but the general direction indicates strengthening financial performance over the five-year span.