Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Net Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Profitability Ratios (Summary)
RTX Corp., profitability ratios
Based on: 10-K (reporting date: 2025-12-31), 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).
The profitability metrics demonstrate a period of fluctuation followed by improvement. Initial increases in profitability were observed between 2021 and 2022, but a subsequent decline occurred in 2023. The years 2024 and 2025 then show a recovery and continued positive trend across all measured ratios.
- Gross Profit Margin
- The gross profit margin increased from 19.40% in 2021 to 20.38% in 2022, indicating improved efficiency in production or sourcing. A decrease to 17.54% in 2023 suggests potential increases in cost of goods sold or pricing pressures. The margin then rebounded to 19.09% in 2024 and further to 20.08% in 2025, surpassing the 2021 level.
- Operating Profit Margin
- Similar to the gross profit margin, the operating profit margin rose from 7.70% to 8.07% in the first two years. A significant drop to 5.17% in 2023 indicates challenges in controlling operating expenses. A strong recovery is then evident, with the margin reaching 8.10% in 2024 and a substantial increase to 10.50% in 2025, suggesting improved operational efficiency and cost management.
- Net Profit Margin
- The net profit margin followed the same pattern as the other profitability ratios, increasing from 6.00% in 2021 to 7.75% in 2022, declining to 4.64% in 2023, and then recovering to 5.91% in 2024 and 7.60% in 2025. This suggests that factors beyond core operations, such as interest expense or taxes, also contributed to the fluctuations.
- Return on Equity (ROE)
- ROE increased from 5.29% in 2021 to 7.16% in 2022, decreased to 5.34% in 2023, and then increased significantly to 7.94% in 2024 and 10.32% in 2025. This indicates improving profitability relative to shareholder equity, potentially driven by increased net income and/or changes in financial leverage.
- Return on Assets (ROA)
- ROA mirrored the trends observed in other ratios, rising from 2.39% to 3.27% between 2021 and 2022, falling to 1.97% in 2023, and then recovering to 2.93% in 2024 and 3.94% in 2025. This demonstrates improving efficiency in utilizing assets to generate profits, aligning with the improvements in other profitability metrics.
Overall, the period between 2021 and 2025 was characterized by a temporary dip in profitability in 2023, followed by a strong recovery and positive trend in the subsequent two years. The consistent pattern across all ratios suggests that the underlying drivers of profitability are interconnected and influenced by similar factors.
Return on Sales
Return on Investment
Gross Profit Margin
RTX Corp., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross margin | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited fluctuations over the five-year period. Initially, an increase was observed, followed by a decline, and then a subsequent recovery and further growth. A detailed examination of the gross profit margin and its underlying components reveals specific patterns.
- Gross Profit Margin Trend
- The gross profit margin began at 19.40% in 2021, increasing to 20.38% in 2022. A decrease was then noted in 2023, with the margin falling to 17.54%. This was followed by a recovery in 2024, reaching 19.09%, and continued growth in 2025, culminating in a margin of 20.08%.
- Relationship to Net Sales
- Net sales generally increased throughout the period, moving from US$64,388 million in 2021 to US$88,603 million in 2025. The initial increase in gross profit margin in 2022 coincided with a rise in net sales. The dip in gross profit margin in 2023 occurred despite a modest increase in net sales, suggesting potential pressures on cost of goods sold. The subsequent improvements in margin in 2024 and 2025 occurred alongside more substantial increases in net sales, indicating improved operational efficiency or pricing power.
- Gross Margin Amounts
- The gross margin in US$ millions increased from US$12,491 million in 2021 to US$13,668 million in 2022. It then decreased to US$12,089 million in 2023 before rising significantly to US$15,410 million in 2024 and further to US$17,789 million in 2025. This demonstrates that while the margin percentage fluctuated, the absolute gross margin amount generally trended upward over the period, particularly in the later years.
The observed patterns suggest a dynamic relationship between sales volume, cost management, and pricing strategies. The recovery in gross profit margin in the latter part of the period is a positive indicator, potentially reflecting successful cost control measures or an ability to maintain pricing despite increased sales.
Operating Profit Margin
RTX Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ 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. | ||||||
| Lockheed Martin Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Operating Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Operating profit margin = 100 × Operating profit ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited fluctuating performance over the five-year period. Initial growth was followed by a significant decline, then a substantial recovery and continued expansion.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 7.70% in 2021, increasing to a peak of 8.07% in 2022. A considerable decrease was then observed in 2023, with the margin falling to 5.17%. Subsequent years demonstrated strong improvement, reaching 8.10% in 2024 and further increasing to 10.50% in 2025. This indicates a recovery from a period of reduced profitability and a return to stronger operational performance.
- Operating Profit Margin - 2021 to 2023
- From 2021 to 2023, the operating profit margin initially showed modest growth, but ultimately experienced a substantial decline. While net sales increased from US$64,388 million to US$68,920 million over the same period, the operating profit decreased from US$4,958 million to US$3,561 million. This suggests that cost pressures or inefficiencies impacted profitability despite revenue growth.
- Operating Profit Margin - 2023 to 2025
- The period from 2023 to 2025 reveals a significant turnaround in the operating profit margin. Alongside a continued increase in net sales, from US$68,920 million to US$88,603 million, operating profit rose dramatically from US$3,561 million to US$9,300 million. This substantial improvement suggests successful implementation of cost control measures, increased operational efficiency, or favorable market conditions.
- Relationship to Net Sales
- The operating profit margin’s fluctuations are correlated with changes in net sales, but the magnitude of the changes in operating profit is greater. The substantial increase in operating profit margin from 2023 to 2025 occurred alongside a significant increase in net sales, indicating that the company was able to leverage revenue growth to improve profitability. The decline in margin from 2022 to 2023, despite increasing sales, suggests that the cost of goods sold and/or operating expenses grew at a faster rate than revenue.
Net Profit Margin
RTX Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to common shareowners | ||||||
| Net sales | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Net Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
Net profit margin = 100 × Net income attributable to common shareowners ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited fluctuations over the five-year period. Initial growth was followed by a decline and subsequent recovery, culminating in a peak at the end of the observed timeframe.
- Net Profit Margin - Overall Trend
- The net profit margin began at 6.00% in 2021, increasing to a high of 7.75% in 2022. A significant decrease was then observed in 2023, with the margin falling to 4.64%. The margin partially recovered in 2024, reaching 5.91%, and continued this upward trajectory, achieving 7.60% in 2025.
The increase from 2021 to 2022 suggests improved profitability, potentially due to factors such as increased operational efficiency or favorable pricing conditions. The substantial decline in 2023 warrants further investigation, as it indicates a weakening in profitability despite a modest increase in net sales. The subsequent recovery in 2024 and 2025, with the margin reaching a new high in 2025, suggests successful implementation of corrective measures or a return to more favorable market conditions.
- Relationship to Net Sales
- Net sales generally increased throughout the period, moving from US$64,388 million in 2021 to US$88,603 million in 2025. However, the net profit margin did not consistently increase alongside net sales, as evidenced by the decline in 2023. This indicates that revenue growth alone does not guarantee improved profitability; cost management and pricing strategies also play a crucial role.
The 2025 net profit margin of 7.60% represents the strongest performance over the analyzed period, indicating a successful balance between revenue generation and cost control. Continued monitoring of this metric is recommended to ensure sustained profitability.
Return on Equity (ROE)
RTX Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to common shareowners | ||||||
| Shareowners’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| ROE, Sector | ||||||
| Capital Goods | ||||||
| ROE, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
ROE = 100 × Net income attributable to common shareowners ÷ Shareowners’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited fluctuating performance over the five-year period. Net income attributable to common shareowners and shareowners’ equity both influenced the observed trends in ROE.
- Overall Trend
- ROE generally increased over the period, despite an intermediate decline. The initial value of 5.29% in 2021 rose to a peak of 10.32% in 2025. This indicates improving profitability relative to shareholder investment over the long term.
- 2021 to 2022
- A substantial increase in ROE was observed, moving from 5.29% to 7.16%. This improvement coincided with a significant rise in net income attributable to common shareowners, from US$3,864 million to US$5,197 million. Shareowners’ equity experienced a slight decrease during this period, but the increase in net income was the primary driver of the ROE improvement.
- 2022 to 2023
- ROE decreased from 7.16% to 5.34%. This decline was primarily attributable to a substantial reduction in net income attributable to common shareowners, falling from US$5,197 million to US$3,195 million. Shareowners’ equity also decreased considerably, but the decline in net income had a more pronounced effect on ROE.
- 2023 to 2025
- ROE demonstrated a consistent upward trend, increasing from 5.34% in 2023 to 7.94% in 2024 and further to 10.32% in 2025. Net income attributable to common shareowners increased steadily during this period, reaching US$6,732 million in 2025. Shareowners’ equity also showed growth, contributing to the overall improvement in ROE. The most significant increase occurred between 2024 and 2025, suggesting accelerating profitability.
The fluctuations in ROE appear closely linked to changes in net income. While shareowners’ equity also plays a role, the magnitude of net income changes had a more direct impact on the observed ROE values.
Return on Assets (ROA)
RTX Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to common shareowners | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| ROA, Sector | ||||||
| Capital Goods | ||||||
| ROA, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2025-12-31), 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).
1 2025 Calculation
ROA = 100 × Net income attributable to common shareowners ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited fluctuating performance over the five-year period. Initial observations indicate an increase followed by a decline, and then a subsequent recovery, culminating in the highest ROA value within the observed timeframe.
- Overall Trend
- The ROA demonstrated a generally positive trajectory, despite an intermediate dip. Starting at 2.39% in 2021, it increased to 3.27% in 2022, representing a notable improvement in asset utilization efficiency. A decrease was then observed in 2023, with the ROA falling to 1.97%. This decline suggests a potential weakening in profitability relative to the asset base. However, the ROA rebounded in 2024 to 2.93%, and continued to improve significantly in 2025, reaching 3.94%.
- Net Income Influence
- The fluctuations in ROA correlate with changes in net income attributable to common shareowners. The increase in ROA from 2021 to 2022 aligns with the growth in net income during that period. Similarly, the decline in ROA in 2023 corresponds with a decrease in net income. The subsequent increases in both net income and ROA in 2024 and 2025 indicate a strengthening relationship between profitability and asset utilization.
- Asset Base Consideration
- Total assets remained relatively stable between 2021 and 2024, with a slight increase observed in 2025. The ROA improvement in 2024 and 2025 occurred despite only a modest increase in the asset base, suggesting that the primary driver of the improved ROA was increased profitability. The decrease in ROA in 2023, despite a similar asset level, reinforces the importance of net income in determining ROA.
In conclusion, the ROA trend suggests a company capable of improving its efficiency in generating profits from its assets. The recent upward trend, particularly the value achieved in 2025, is a positive indicator, but continued monitoring is warranted to assess the sustainability of this performance.