Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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Profitability Ratios (Summary)
Trane Technologies plc, profitability ratios
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Gross Profit Margin
- The gross profit margin demonstrates relative stability over the five-year period, fluctuating within a narrow range between 30.54% and 31.62%. A slight increase was observed in 2021, reaching 31.62%, before a modest decline to 31.05% in 2022. Overall, the margin indicates consistent ability to control cost of goods sold relative to revenue.
- Operating Profit Margin
- The operating profit margin shows a positive upward trend from 12.24% in 2018 to 15.13% in 2022. Particularly notable is the increase between 2020 and 2022, rising from 12.31% to 15.13%, suggesting improving operational efficiency or possibly better expense management over this period.
- Net Profit Margin
- The net profit margin declined from 8.54% in 2018 to 6.86% in 2020, before recovering substantially to 10.98% by the end of 2022. This recovery after 2020 may reflect enhanced profitability from core operations or reductions in non-operating expenses, contributing to a stronger bottom line in recent years.
- Return on Equity (ROE)
- The return on equity experienced volatility during the period, starting at 19.05% in 2018, dipping to 13.34% in 2020, then climbing sharply to 28.85% in 2022. This significant increase post-2020 indicates improved effectiveness in generating returns for shareholders, likely driven by higher net income or improved capital management.
- Return on Assets (ROA)
- The return on assets follows a similar pattern to ROE, decreasing from 7.47% in 2018 to a low of 4.71% in 2020, before rebounding to 9.71% in 2022. The enhancement in asset efficiency after 2020 suggests better utilization of assets in generating profits, aligned with the improvements seen in profitability metrics.
Return on Sales
Return on Investment
Gross Profit Margin
Trane Technologies plc, gross profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross profit | ||||||
| Net revenues | ||||||
| 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. | ||||||
| RTX Corp. | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Gross profit margin = 100 × Gross profit ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Revenues
- Net revenues demonstrated variability over the analyzed period. After increasing from 15,668,200 thousand US dollars in 2018 to 16,598,900 thousand in 2019, revenues experienced a notable decline in 2020, falling to 12,454,700 thousand. This was followed by a recovery phase in 2021 and 2022, with revenues rising to 14,136,400 thousand and then further to 15,991,700 thousand.
- Gross Profit
- Gross profit showed a similar pattern to net revenues. It increased slightly from 4,820,600 thousand US dollars in 2018 to 5,147,400 thousand in 2019 before dropping significantly to 3,803,400 thousand in 2020. A recovery trend was observed in subsequent years with gross profit reaching 4,469,600 thousand in 2021 and further increasing to 4,964,800 thousand in 2022. Despite fluctuations, gross profit remained below the peak levels observed in 2019.
- Gross Profit Margin
- The gross profit margin remained relatively stable throughout the period, fluctuating between approximately 30.5% and 31.6%. It was 30.77% in 2018, increased slightly to 31.01% in 2019, dipped marginally to 30.54% in 2020, rose to 31.62% in 2021, and adjusted slightly down to 31.05% in 2022. This indicates consistent efficiency in managing the cost of goods sold relative to revenue, despite the variations in absolute profit and revenue values.
Operating Profit Margin
Trane Technologies plc, operating profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating income | ||||||
| Net revenues | ||||||
| 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. | ||||||
| RTX Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Operating Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Operating profit margin = 100 × Operating income ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Income
- The operating income exhibited a notable fluctuation over the observed periods. Starting at 1,917,400 thousand US dollars in 2018, it increased moderately to 2,017,600 thousand in 2019. A decline occurred in 2020, dropping to 1,532,800 thousand, likely influenced by external factors impacting the business environment. Recovery commenced in 2021, with operating income rising significantly to 2,023,300 thousand, followed by a continued increase to 2,418,900 thousand in 2022, surpassing previous highs.
- Net Revenues
- Net revenues demonstrated a similar trend of volatility. Revenues increased from 15,668,200 thousand US dollars in 2018 to 16,598,900 thousand in 2019. However, in 2020, revenues fell sharply to 12,454,700 thousand, followed by a partial recovery to 14,136,400 thousand in 2021. By 2022, revenues improved further to reach 15,991,700 thousand. This pattern mirrors the operational income trend, reflecting the broader market or economic conditions affecting sales volume or pricing.
- Operating Profit Margin
- The operating profit margin was relatively stable between 2018 and 2020, holding around 12.2%. In 2021, a marked improvement occurred with the margin expanding to 14.31%, followed by a further increase to 15.13% in 2022. This upward trend indicates enhanced operational efficiency or improved cost management during the latter years, contributing to higher profitability despite earlier revenue declines.
Net Profit Margin
Trane Technologies plc, net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings attributable to Trane Technologies plc | ||||||
| Net revenues | ||||||
| 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. | ||||||
| RTX Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Capital Goods | ||||||
| Net Profit Margin, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
Net profit margin = 100 × Net earnings attributable to Trane Technologies plc ÷ Net revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings Attributable to Trane Technologies plc
- The net earnings demonstrate fluctuations over the reviewed period. The earnings increased modestly from 1,337,600 thousand USD in 2018 to 1,410,900 thousand USD in 2019. In 2020, there was a notable decline to 854,900 thousand USD. However, a significant recovery is observed in the subsequent years, with earnings rising to 1,423,400 thousand USD in 2021 and reaching the highest point at 1,756,500 thousand USD in 2022.
- Net Revenues
- Net revenues exhibit a rising trend initially, growing from 15,668,200 thousand USD in 2018 to 16,598,900 thousand USD in 2019. In 2020, revenues declined sharply to 12,454,700 thousand USD, aligning with the period of economic challenges globally. The revenues then recovered partially, increasing to 14,136,400 thousand USD in 2021 and further to 15,991,700 thousand USD in 2022. Despite the recovery, revenues in 2022 remain below the 2019 peak.
- Net Profit Margin
- The net profit margin follows a generally positive trajectory with some volatility. Margins held steady between 8.5% and 8.54% in 2018 and 2019, followed by a decline to 6.86% in 2020, reflecting reduced profitability during a challenging year. From 2020 onwards, the margin improved markedly, reaching 10.07% in 2021 and further increasing to 10.98% in 2022, indicating enhanced cost management or operational efficiency leading to higher profitability relative to revenues.
- Overall Analysis
- The data reveals that the company experienced a downturn in 2020 with decreases in both net earnings and revenues, likely impacted by adverse global conditions. From 2021 onwards, there is a clear recovery trend in both earnings and revenues, with net profit margin showing consistent improvement in the latter years. The increase in margin above pre-2020 levels suggests improved profitability despite revenues not fully returning to their previous peak by 2022. This overall pattern indicates resilience and effective adjustment strategies contributing to stronger financial performance post-2020.
Return on Equity (ROE)
Trane Technologies plc, ROE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings attributable to Trane Technologies plc | ||||||
| Total Trane Technologies plc shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| ROE, Sector | ||||||
| Capital Goods | ||||||
| ROE, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROE = 100 × Net earnings attributable to Trane Technologies plc ÷ Total Trane Technologies plc shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net earnings attributable to Trane Technologies plc
- Net earnings show fluctuating trends during the reviewed five-year period. Starting at 1,337,600 thousand US dollars in 2018, net earnings increased slightly to 1,410,900 thousand US dollars in 2019. However, there was a notable decline in 2020 to 854,900 thousand US dollars, likely influenced by adverse conditions in that year. Subsequently, earnings rebounded substantially to 1,423,400 thousand US dollars in 2021 and continued to rise to 1,756,500 thousand US dollars in 2022, reflecting strong recovery and growth in profitability.
- Total Trane Technologies plc shareholders’ equity
- Shareholders’ equity exhibited a declining trend over the five years. Beginning at 7,022,700 thousand US dollars in 2018, equity increased modestly in 2019 to 7,267,600 thousand US dollars. From 2019 onwards, there is a consistent decrease yearly, dropping to 6,407,700 thousand in 2020, 6,255,900 thousand in 2021, and further down to 6,088,600 thousand US dollars by the end of 2022. This declining pattern suggests either increased distributions, share buybacks, or retained earnings impacts reducing equity base over time.
- Return on Equity (ROE)
- The ROE percentage shows a strong upward trajectory after an initial downturn. Beginning at 19.05% in 2018, ROE increased slightly to 19.41% in 2019, then dropped sharply to 13.34% in 2020, coinciding with the net earnings decline noted for that year. From 2020 onwards, ROE experienced a significant recovery, rising to 22.75% in 2021 and reaching a high of 28.85% in 2022. The substantial increase in ROE through the last two years indicates enhanced effectiveness in generating profits from shareholders' equity despite the declining equity base.
Return on Assets (ROA)
Trane Technologies plc, ROA calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings attributable to Trane Technologies plc | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | ||||||
| Caterpillar Inc. | ||||||
| Eaton Corp. plc | ||||||
| GE Aerospace | ||||||
| Honeywell International Inc. | ||||||
| Lockheed Martin Corp. | ||||||
| RTX Corp. | ||||||
| ROA, Sector | ||||||
| Capital Goods | ||||||
| ROA, Industry | ||||||
| Industrials | ||||||
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2022 Calculation
ROA = 100 × Net earnings attributable to Trane Technologies plc ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Earnings Attributable to Trane Technologies plc
- The net earnings demonstrate a fluctuating trend over the observed period. Earnings increased from 1,337,600 thousand US dollars in 2018 to 1,410,900 thousand US dollars in 2019, followed by a significant drop to 854,900 thousand US dollars in 2020. However, there was a substantial recovery in 2021 with earnings rising to 1,423,400 thousand US dollars and continuing to grow to 1,756,500 thousand US dollars in 2022. This pattern indicates resilience and an overall positive growth trajectory after a challenging year in 2020.
- Total Assets
- Total assets showed an increasing trend initially, rising from 17,914,900 thousand US dollars in 2018 to a peak of 20,492,300 thousand US dollars in 2019. The asset base then contracted to 18,156,700 thousand US dollars in 2020 and remained relatively stable around this level through 2021 and 2022, with minor fluctuations. This suggests a period of asset optimization or divestment after 2019, with stabilization in subsequent years.
- Return on Assets (ROA)
- ROA experienced variability consistent with changes in net earnings and asset levels. It decreased from 7.47% in 2018 to 6.89% in 2019, then fell further to 4.71% in 2020, reflecting the dip in profitability and/or increased asset base that year. ROA then significantly improved to 7.88% in 2021 and further to 9.71% in 2022, indicating enhanced profitability relative to assets, likely driven by the rebound in net earnings combined with stable total asset levels.