Boeing Co. (NYSE:BA)

The period under review demonstrates significant volatility in Return on Invested Capital (ROIC). Initial values indicate negative returns, which worsen considerably before a substantial improvement is observed in the later years.

Net Operating Profit After Taxes (NOPAT)

NOPAT is initially negative, experiencing a slight decrease from 2021 to 2022. A substantial decline is then observed in 2023, followed by a dramatic negative result in 2024. A significant positive shift occurs in 2025, resulting in a positive NOPAT value.

Invested Capital

Invested capital exhibits a modest increase from 2021 to 2022. A decrease is noted in 2023, followed by a recovery in 2024 and a further increase in 2025. The overall trend suggests relative stability with fluctuations.

Return on Invested Capital (ROIC)

ROIC begins with negative values in 2021 and 2022, at -5.35% and -5.72% respectively, indicating that the company was not generating returns exceeding its cost of capital. The negative trend continues with a slight worsening in 2023 (-0.17%). A substantial decline is then observed in 2024, with ROIC reaching -20.36%. However, a marked improvement is evident in 2025, with ROIC rising to 9.77%, signifying a return to positive and potentially attractive returns on invested capital.

The substantial swing in ROIC is primarily driven by the fluctuations in NOPAT. While invested capital remains relatively stable, the dramatic changes in profitability have a pronounced effect on the overall return generated. The positive ROIC in 2025 suggests a potential turnaround, but the preceding years demonstrate a period of significant underperformance.

The period under review demonstrates significant volatility in financial performance, as evidenced by the fluctuations in key profitability and efficiency metrics. Return on Invested Capital (ROIC) experienced substantial shifts, driven by changes in operating profitability, capital efficiency, and the effective tax rate.

Operating Profit Margin (OPM)

The Operating Profit Margin exhibited a marked improvement from negative values in 2021 and 2022 to a positive 0.85% in 2023. However, this positive trend was reversed in 2024, with the margin declining sharply to -14.62%. A recovery is then observed in 2025, reaching 6.87%. This suggests considerable sensitivity to external factors or internal operational challenges.

Turnover of Capital (TO)

Turnover of Capital generally increased over the period, moving from 1.26 in 2021 to 1.73 in 2023. This indicates improving efficiency in utilizing capital to generate revenue. A slight decrease to 1.32 in 2024 was followed by another increase to 1.67 in 2025, suggesting a sustained, though not consistently linear, improvement in asset utilization.

Effective Cash Tax Rate (CTR)

The metric ‘1 – Effective Cash Tax Rate’ remained constant at 100.00% for 2021 and 2022, indicating a full tax payment. A significant deviation occurred in 2023, falling to -11.76%, suggesting a tax benefit or credit. The rate returned to 100.00% in 2024 before decreasing to 85.37% in 2025, implying a reduced tax burden. This fluctuation significantly impacts net profitability and, consequently, ROIC.

Return on Invested Capital (ROIC)

ROIC mirrored the volatility observed in the underlying components. Negative ROIC values were recorded for 2021 (-5.35%) and 2022 (-5.72%). A slight improvement to -0.17% in 2023 was overshadowed by a substantial decline to -20.36% in 2024. A strong recovery is then evident in 2025, with ROIC reaching 9.77%. The substantial swings in ROIC highlight the interplay between operating margin, capital turnover, and the effective tax rate, and suggest a period of considerable financial instability followed by a potential turnaround.

The decomposition of ROIC reveals that the negative performance in 2024 was primarily driven by the significantly negative Operating Profit Margin, despite a reasonable Turnover of Capital. The positive ROIC in 2025 is attributable to the combined effect of an improved Operating Profit Margin and a lower effective tax rate, alongside continued capital efficiency.

The operating profit margin exhibited significant volatility over the five-year period. Initial observations reveal a period of negative margins followed by improvement, then a substantial decline, and finally, a return to positive territory.

Operating Profit Margin (OPM) - Overall Trend

The OPM began at -3.17% in 2021 and decreased to -3.49% in 2022, indicating worsening profitability relative to revenue. A substantial positive shift occurred in 2023, with the OPM reaching 0.85%. However, this improvement was short-lived, as the OPM plummeted to -14.62% in 2024. The final year observed, 2025, showed a strong recovery, with the OPM rising to 6.87%.

Relationship to Net Operating Profit Before Taxes (NOPBT)

The fluctuations in OPM directly correlate with the values of NOPBT. The negative OPM values in 2021 and 2022 correspond with the negative NOPBT figures for those years. The positive OPM in 2023 and 2025 aligns with positive NOPBT, while the significant negative OPM in 2024 is associated with a large negative NOPBT.

Relationship to Revenues

Revenues generally increased over the period, moving from US$62,286 million in 2021 to US$89,463 million in 2025. However, revenue growth alone did not guarantee profitability, as evidenced by the negative OPM in 2021, 2022, and 2024. The substantial increase in revenue from 2024 to 2025 coincided with a significant improvement in OPM, suggesting that increased sales volume, combined with cost management or pricing strategies, contributed to the positive result in 2025.

Volatility

The OPM demonstrates considerable volatility. The swing from -14.62% in 2024 to 6.87% in 2025 is particularly noteworthy and warrants further investigation to understand the underlying drivers of such a dramatic change. The large negative value in 2024 suggests potentially significant operational challenges or one-time events impacting profitability.

In summary, the operating profit margin experienced a turbulent five-year period, characterized by initial losses, a brief period of profitability, a substantial decline, and a strong recovery. The observed trends are closely linked to both net operating profit and revenue performance, highlighting the importance of both sales volume and cost control in achieving sustainable profitability.

The period under review demonstrates fluctuating performance in the turnover of capital. Revenues and invested capital both exhibit variability, influencing the calculated turnover ratio.

Revenue Trend

Revenues increased from US$62,286 million in 2021 to US$66,608 million in 2022, representing a moderate growth rate. A significant increase was then observed in 2023, reaching US$77,794 million. However, revenues decreased in 2024 to US$66,517 million before recovering substantially to US$89,463 million in 2025.

Invested Capital Trend

Invested capital showed a slight increase from US$49,465 million in 2021 to US$50,866 million in 2022. A decrease was noted in 2023, falling to US$44,905 million. Invested capital then rose again in 2024 to US$50,271 million, and continued to increase in 2025, reaching US$53,662 million.

Turnover of Capital (TO) Analysis

The turnover of capital ratio began at 1.26 in 2021 and increased to 1.31 in 2022, indicating improved efficiency in generating revenue from invested capital. A substantial increase was observed in 2023, with the ratio reaching 1.73, suggesting a significant improvement in capital utilization. The ratio decreased to 1.32 in 2024, coinciding with the revenue decline. Finally, the ratio increased to 1.67 in 2025, aligning with the substantial revenue recovery.

The fluctuations in the turnover of capital ratio closely mirror the changes in revenue. The highest ratio in 2023 corresponds with the peak in revenue, while the lowest ratio in 2024 aligns with the revenue decrease. This suggests a strong correlation between revenue generation and the efficiency with which capital is employed.

Overall, the turnover of capital demonstrates sensitivity to revenue performance. While there is a general upward trend over the period, the ratio experiences notable volatility, particularly in 2023 and 2024.

The effective cash tax rate exhibits significant volatility over the observed period. Available information indicates the rate was not calculated for 2021 and 2022. A substantial rate of 111.76% is recorded for 2023, followed by a considerable decrease to 14.63% in 2025.

Effective Cash Tax Rate (CTR) - Trend Analysis

The CTR demonstrates a marked shift from an unrecorded value in the initial years to a high of 111.76% in 2023. This suggests a potentially unusual tax situation in that year, possibly related to the utilization of tax loss carryforwards or other specific tax adjustments that increased cash tax payments relative to pre-tax income. The subsequent decline to 14.63% in 2025 indicates a return towards a more conventional tax burden, coinciding with a substantial increase in net operating profit before taxes.

Fluctuations in the CTR are closely linked to the behavior of net operating profit before taxes. The negative NOPBT values in 2021 and 2022 likely precluded a meaningful CTR calculation. The large negative NOPBT in 2024 also resulted in no CTR calculation. The relationship between cash operating taxes and NOPBT is critical to understanding the CTR; the high CTR in 2023 suggests that despite positive NOPBT, cash taxes paid were disproportionately high.

Cash Operating Taxes & NOPBT Relationship

Cash operating taxes increased from US$676 million in 2021 to US$736 million in 2023, while NOPBT transitioned from negative values to a positive US$658 million. However, the substantial increase in NOPBT to US$6,144 million in 2025 was accompanied by an increase in cash operating taxes to US$899 million, resulting in a significantly lower CTR. This suggests a more typical tax liability relative to earnings in the later period.

Further investigation into the specific tax adjustments and accounting treatments applied in 2023 is warranted to fully understand the drivers behind the exceptionally high CTR observed in that year.