Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Current Ratio since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
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Profitability Ratios (Summary)
Old Dominion Freight Line Inc., profitability ratios
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Return on Sales | ||||||
| Operating profit margin | ||||||
| Net profit margin | ||||||
| Return on Investment | ||||||
| Return on equity (ROE) | ||||||
| Return on assets (ROA) | ||||||
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).
- Operating Profit Margin
- The operating profit margin demonstrates a consistent upward trend over the five-year period. Starting at 20.21% in 2018, it experienced a slight dip in 2019 to 19.92%, followed by a steady increase each subsequent year, reaching 29.4% in 2022. This indicates improving operational efficiency and cost management, enhancing profitability from core business activities.
- Net Profit Margin
- Net profit margin also exhibits a positive trajectory. It remained stable at 14.98% from 2018 to 2019, then increased progressively each year, culminating at 22% in 2022. This reflects not only better operational profits but also effective control over non-operating expenses and taxes, contributing to higher overall profitability.
- Return on Equity (ROE)
- The return on equity exhibits some volatility but ultimately shows a marked increase. ROE decreased from 22.6% in 2018 to 19.98% in 2019, then slightly rose to 20.22% in 2020. A significant uplift is observed in 2021, reaching 28.11%, followed by a pronounced surge to 37.7% in 2022. This suggests improved efficiency in generating profits from shareholders' equity, driven possibly by both enhanced net income and effective capital management.
- Return on Assets (ROA)
- Return on assets reflects a noteworthy improvement overall. After an initial decline from 17.08% in 2018 to approximately 15.4% in 2019 and 2020, a robust recovery occurred with jumps to 21.45% in 2021 and 28.46% in 2022. This indicates increased effectiveness in utilizing total assets to generate earnings, highlighting operational enhancements and asset management.
Return on Sales
Return on Investment
Operating Profit Margin
Old Dominion Freight Line Inc., 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 | ||||||
| Revenue from operations | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Transportation | ||||||
| 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 ÷ Revenue from operations
= 100 × ÷ =
2 Click competitor name to see calculations.
- Operating Income
- Operating income demonstrated a consistent upward trend over the five-year period. Beginning at $817,051 thousand in 2018, it experienced moderate growth in 2019 to $818,706 thousand, followed by a more pronounced increase to $906,882 thousand in 2020. The growth accelerated significantly in 2021, reaching $1,391,602 thousand, and continued this upward trajectory into 2022 with $1,840,632 thousand. This progression indicates improving profitability and effective cost management over time.
- Revenue from Operations
- The revenue from operations showed some variability initially but stronger growth in the latter years. Revenues were $4,043,695 thousand in 2018, slightly increasing to $4,109,111 thousand in 2019, then decreasing moderately to $4,015,129 thousand in 2020. However, there was a substantial increase in 2021, reaching $5,256,328 thousand, followed by further growth to $6,260,077 thousand in 2022. This pattern suggests a recovery and expansion phase starting in 2021, possibly driven by increased sales volume or pricing power.
- Operating Profit Margin
- The operating profit margin moved upward over the period, reflecting enhanced operational efficiency and profitability. Starting at 20.21% in 2018, it slightly declined to 19.92% in 2019, then increased significantly to 22.59% in 2020. This upward trend continued, climbing to 26.47% in 2021 and reaching 29.4% in 2022. The consistent margin improvement indicates better cost control measures and potentially a more favorable product or service mix.
- Overall Analysis
- Collectively, the data portray a positive financial trend with revenues rebounding strongly after a slight dip in 2020, coupled with significant improvements in both operating income and operating profit margin. The acceleration in operating income and margin in the last two years suggests enhanced operational leverage and profitability, which may be attributable to strategic initiatives, market conditions, or efficiency improvements. The company’s ability to increase profits at a higher rate than revenue implies effective management and strengthening competitive positioning.
Net Profit Margin
Old Dominion Freight Line Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net income | ||||||
| Revenue from operations | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Transportation | ||||||
| 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 income ÷ Revenue from operations
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net income
- Net income has shown a consistent and substantial increase over the five-year period under review. Starting at approximately 605.7 million USD in 2018, it experienced steady growth each year, reaching nearly 1.38 billion USD by the end of 2022. The growth was particularly pronounced from 2020 onward, with a notable jump between 2020 and 2021, and continuing strong into 2022.
- Revenue from operations
- Revenue experienced moderate fluctuation between 2018 and 2020, with a slight dip in 2020 compared to the previous years. However, from 2020 through 2022, there was significant revenue expansion, reaching over 6.26 billion USD in 2022. This indicates robust growth in sales or services, especially notable after 2020, with a strong upward trend observed in the last two years.
- Net profit margin
- The net profit margin remained stable at just under 15% from 2018 through 2019, then improved notably in 2020 to approximately 16.75%. The margin continued to increase markedly in 2021 and 2022, ultimately reaching 22%. This positive trend suggests enhanced profitability and possibly improved operational efficiency or better cost management over the years.
- Overall analysis
- Across the five years, the company demonstrated sustained financial improvement, with revenues growing substantially in the latter years, complemented by strong net income growth and increasing profitability. The simultaneous rise in net profit margin alongside revenue suggests that the company has not only increased its sales base but also improved its cost controls or pricing strategies. The data reflect a healthy financial trajectory with enhanced shareholder value potential.
Return on Equity (ROE)
Old Dominion Freight Line Inc., 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 income | ||||||
| Shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| ROE, Sector | ||||||
| Transportation | ||||||
| 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 income ÷ Shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- The net income demonstrates a consistent upward trend over the five-year period. Starting at 605,668 thousand US dollars in 2018, it increased moderately each year until 2020. Subsequently, there was a significant acceleration in growth, with net income rising sharply to 1,034,375 thousand in 2021 and further to 1,377,159 thousand in 2022, reflecting strong profitability improvements.
- Shareholders’ Equity
- Shareholders’ equity also showed positive growth but with a more moderate pace compared to net income. It increased steadily from 2,680,483 thousand US dollars in 2018 to a peak of 3,679,807 thousand in 2021. However, in 2022, there was a slight decline to 3,652,917 thousand, indicating a minor reduction in the equity base despite the strong profit generation in that year.
- Return on Equity (ROE)
- The ROE exhibits an overall increasing trend, illustrating enhanced efficiency in using equity to generate profits. It initially declined from 22.6% in 2018 to around 20% in 2019 and 2020. From 2021 onwards, ROE rose sharply, reaching 28.11% and then 37.7% in 2022. This notable improvement aligns with the substantial rise in net income and indicates better profitability relative to shareholders’ equity.
- Summary
- The financial data reflects a strong performance trajectory, particularly from 2020 onwards. The company achieved significant gains in net income and ROE, signaling improved operational efficiency and profitability. Despite this, the slight decrease in shareholders’ equity in 2022 suggests potential distribution to shareholders or other equity changes that offset retained earnings growth. Overall, the trends indicate robust financial health with increasing returns to equity holders over the period analyzed.
Return on Assets (ROA)
Old Dominion Freight Line Inc., 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 income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| Union Pacific Corp. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| ROA, Sector | ||||||
| Transportation | ||||||
| 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 income ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Trend
- The net income has shown a consistent upward trajectory over the five-year period. Starting from approximately $605.7 million in 2018, it increased modestly in 2019 and 2020, followed by a more significant rise in 2021 and 2022. Notably, the growth accelerated in the last two years, with net income reaching approximately $1.38 billion in 2022, indicating strong profitability improvements.
- Total Assets Evolution
- Total assets have steadily increased from around $3.55 billion in 2018 to about $4.84 billion in 2022. The growth pace appears steady, reflecting ongoing asset accumulation or investment over the years. The most substantial growth occurred between 2019 and 2021, with a less pronounced increase from 2021 to 2022.
- Return on Assets (ROA) Development
- ROA exhibited a slight decline from 17.08% in 2018 to 15.41% in 2019 and remained relatively stable in 2020. However, in 2021, a considerable improvement occurred, with ROA rising sharply to 21.45%, followed by further enhancement to 28.46% in 2022. This trend suggests increasing efficiency in utilizing the company’s assets to generate earnings, particularly in the last two years.
- Overall Observations
- The data reflects a company experiencing growth in profitability and asset base, combined with increasing asset utilization efficiency. The acceleration in net income and ROA in the final two years implies effective management strategies or favorable market conditions enhancing financial performance. The steady asset base growth supports sustainable expansion, although the slowing asset growth in the latest year warrants monitoring for potential impacts on future returns.