Raytheon Co. (NYSE:RTN)

Return on Assets (ROA)

The return on assets showed a generally positive trend over the five-year period. Starting at 7.08% in 2015, it slightly increased to 7.36% in 2016, followed by a decline to 6.56% in 2017. Subsequently, there was a noticeable improvement reaching 9.13% in 2018 and further increasing to 9.67% in 2019. This indicates an overall enhancement in asset efficiency, particularly in the last two years.

Financial Leverage

Financial leverage maintained a relatively stable pattern with minor fluctuations. It rose from 2.89 in 2015 to 3.10 in 2017, indicating a gradual increase in the use of debt or financial obligations to finance assets. After 2017, the leverage declined to 2.78 in 2018 and slightly increased again to 2.83 in 2019. The variations suggest modest adjustments in the capital structure with a slight tendency toward reduced leverage after 2017.

Return on Equity (ROE)

Return on equity exhibited a strong upward trajectory overall. Starting at 20.48% in 2015, ROE increased to 21.97% in 2016 but experienced a dip to 20.32% in 2017. Afterwards, there was a significant rise to 25.36% in 2018 and further to 27.35% in 2019. This pattern reflects enhanced profitability for shareholders, particularly marked in the last two years, aligning with the improvements observed in return on assets.

Net Profit Margin

The net profit margin exhibited a fluctuating trend over the five-year period. Starting at 8.92% in 2015, it slightly increased to 9.19% in 2016, then declined to 7.98% in 2017. Subsequently, it showed a notable upward movement, reaching 10.75% in 2018 and further rising to 11.46% in 2019. This pattern indicates an overall improvement in profitability, especially in the latter years.

Asset Turnover

The asset turnover ratio demonstrated a gradual increase from 0.79 in 2015 to a peak of 0.85 in 2018, before a minor decline to 0.84 in 2019. This suggests a steady enhancement in the efficiency with which assets were used to generate sales, though the slight dip in the final year may indicate a plateau.

Financial Leverage

Financial leverage showed some variability, starting at 2.89 in 2015 and increasing to 3.10 in 2017. It then decreased to 2.78 in 2018 and slightly rose again to 2.83 in 2019. This reflects a moderate fluctuation in the use of debt relative to equity, with a tendency toward stabilization in the last two years.

Return on Equity (ROE)

ROE followed a generally rising trajectory, starting at 20.48% in 2015, increasing to 21.97% in 2016, then dipping to 20.32% in 2017. A significant increase occurred afterward, with ROE reaching 25.36% in 2018 and climbing further to 27.35% in 2019. This suggests enhanced overall profitability and value generation for shareholders, particularly from 2018 onward.

Tax Burden

The tax burden ratio exhibits fluctuations over the five-year period. It decreased from 0.74 in 2015 to a low of 0.64 in 2017, indicating a reduction in the proportion of earnings lost to taxes. However, it increased sharply to 0.92 in 2018 before declining again to 0.84 in 2019. This variability suggests changing tax expense impacts on net income during the period.

Interest Burden

The interest burden ratio steadily improved from 0.92 in 2015 to 0.96 in 2019. This consistent increase reflects a gradual reduction in interest expenses relative to earnings before interest and taxes, indicating better interest cost management or lower debt servicing costs over time.

EBIT Margin

The EBIT margin demonstrated slight volatility yet an overall increasing trend, with a dip from 13.71% in 2016 to 12.41% in 2018 followed by a recovery to 14.33% in 2019. This suggests that operational profitability experienced some pressure mid-period but ultimately improved, highlighting enhanced earnings efficiency from core operations in the final year.

Asset Turnover

The asset turnover ratio showed gradual improvement from 0.79 in 2015 to 0.85 in 2018, with a minor decline to 0.84 in 2019. This trend indicates a general increase in the efficiency of asset utilization to generate revenue, though the slight decrease in 2019 could suggest marginally less efficient asset use in that year.

Financial Leverage

Financial leverage rose from 2.89 in 2015 to a peak of 3.10 in 2017, signifying an increasing reliance on debt or other liabilities relative to equity. However, leverage decreased noticeably to 2.78 in 2018 before slightly increasing again to 2.83 in 2019. The reduction in leverage after 2017 might reflect efforts to deleverage or improve capital structure.

Return on Equity (ROE)

ROE followed a positive trajectory overall, rising from 20.48% in 2015 to 27.35% in 2019. Despite a dip to 20.32% in 2017, the return to 25.36% in 2018 and further increase in 2019 indicates enhanced effectiveness in generating shareholder returns, potentially driven by improvements in operational performance and leverage management.

The financial analysis reveals several notable trends over the five-year period ending in 2019. The net profit margin demonstrates a generally positive trajectory, increasing from 8.92% in 2015 to 11.46% in 2019. A minor dip was observed in 2017, where the margin declined to 7.98%, but the margin subsequently recovered and improved significantly in the following years, reaching its highest point in 2019. This pattern indicates enhanced profitability and potentially better cost control or higher revenue quality during the latter years.

The asset turnover ratio shows a steady upward movement from 0.79 in 2015 to 0.85 in 2018, before a slight decrease to 0.84 in 2019. This slight decline at the end of the period is minimal and does not suggest a major shift. Overall, the asset turnover trend suggests increasing efficiency in using assets to generate sales, reflecting positive operational performance improvements over the years.

Return on assets (ROA) follows a trend that closely correlates with the movements in both net profit margin and asset turnover. Starting at 7.08% in 2015, ROA experienced a small decline to 6.56% in 2017, but subsequently rose sharply to 9.67% by 2019. This increase illustrates improved overall asset profitability and effective management of the company’s resources.

Net Profit Margin

Consistent upward trend with a temporary dip in 2017, indicating improving profitability and efficient cost management in recent years.

Asset Turnover

Gradual improvement over the period, signifying enhanced asset utilization efficiency, with only a negligible decrease in the final year.

Return on Assets

Increased significantly after a minor setback in 2017, reflecting stronger asset profitability aligning with improved margins and turnover.

Tax Burden

The tax burden ratio exhibited fluctuations over the analyzed period. It decreased from 0.74 in 2015 to a low of 0.64 in 2017, indicating a reduction in the tax impact on pre-tax income. Subsequently, it rose sharply to 0.92 in 2018 before declining somewhat to 0.84 in 2019. This suggests variability in the company's effective tax rate, with a notable increase toward the end of the period.

Interest Burden

The interest burden ratio showed a consistent upward trend across the years. Beginning at 0.92 in 2015, it increased incrementally each year, reaching 0.96 in 2019. This steady improvement implies a progressively lower interest expense burden relative to earnings before interest and taxes, reflecting potential debt management or favorable financing conditions.

EBIT Margin

The EBIT margin percentage experienced moderate variations. Starting at 13.08% in 2015, it peaked at 13.71% in 2016, before declining to its lowest point of 12.41% in 2018. However, the margin rebounded to 14.33% in 2019, surpassing previous levels. This pattern indicates some fluctuations in operational profitability, with a strong recovery towards the end of the analyzed timeframe.

Asset Turnover

The asset turnover ratio demonstrated a generally positive but modest upward trend from 0.79 in 2015 to 0.85 in 2018, followed by a slight decrease to 0.84 in 2019. This suggests improved efficiency in utilizing assets to generate sales over most of the period, with a marginal decline in the final year.

Return on Assets (ROA)

ROA exhibited variability with an overall upward movement. It started at 7.08% in 2015, experienced a dip to 6.56% in 2017, then increased sharply to 9.13% in 2018 and further to 9.67% in 2019. This trend reflects an enhancement in asset profitability, particularly notable in the most recent years, aligning with the improvements seen in EBIT margin and asset turnover.

Tax Burden

The tax burden ratio exhibits a fluctuating trend over the analyzed period. It decreased from 0.74 in 2015 to a low of 0.64 in 2017, suggesting a reduction in tax expenses relative to earnings during this period. However, it sharply increased to 0.92 in 2018 before slightly declining to 0.84 in 2019, indicating variability in tax impacts on the company's profitability.

Interest Burden

The interest burden ratio shows a consistent and gradual improvement over the years, rising from 0.92 in 2015 to 0.96 in 2019. This trend reflects a steady decrease in interest expenses relative to earnings before interest and taxes, implying enhanced financial leverage or reduced interest costs.

EBIT Margin

The EBIT margin percentage demonstrates moderate fluctuations. It increased from 13.08% in 2015 to 13.71% in 2016, followed by a slight decline to 13.19% in 2017 and a further decrease to 12.41% in 2018. In 2019, the margin rebounded to 14.33%, representing the highest margin in the five-year timeframe, indicating improved operational efficiency or profitability.

Net Profit Margin

The net profit margin percentage presents variability with an overall upward trend. Beginning at 8.92% in 2015, it rose marginally to 9.19% in 2016, then dropped to 7.98% in 2017. A significant increase followed in 2018, reaching 10.75%, and further rose to 11.46% in 2019. This pattern suggests fluctuations in bottom-line profitability, with considerable improvements in the latter years.