Boeing Co. (NYSE:BA)

The period under review demonstrates significant fluctuations in financial performance metrics. Return on Assets (ROA) initially exhibits negative values, followed by a substantial shift towards positive territory, while Return on Equity (ROE) shows a late-stage emergence with a high value. The introduction of Financial Leverage in the final year significantly impacts the interpretation of ROE.

Return on Assets (ROA)

ROA begins at -3.03% in 2021 and declines to -3.60% in 2022, indicating worsening profitability relative to its assets. A modest recovery is seen in 2023 with an ROA of -1.62%. However, ROA experiences a sharp decline in 2024, reaching -7.56%. A substantial turnaround occurs in 2025, with ROA rising to 1.33%, suggesting improved asset utilization and profitability.

Financial Leverage

Financial Leverage is not reported for the initial four years. It appears in 2025 at a value of 30.85. This indicates a significant reliance on debt financing in that year.

Return on Equity (ROE)

ROE is not reported for the initial four years. In 2025, ROE is reported as 40.98%. Given the Financial Leverage of 30.85 in the same year, the high ROE is likely driven by the use of debt. Without prior year ROE values, it is difficult to assess the trend, but the 2025 value is notably high and warrants further investigation into the sustainability of this level of return given the elevated leverage.

The substantial increase in ROE in 2025, coupled with the introduction of a high Financial Leverage ratio, suggests a significant shift in the company’s capital structure and a potential increase in financial risk. The earlier negative ROA values indicate underlying operational challenges that were seemingly overcome by 2025, but the reliance on debt to achieve a high ROE requires careful monitoring.

The period under review demonstrates significant fluctuations in profitability and efficiency metrics, culminating in a substantial return on equity in the final year. A detailed examination of the three components of DuPont analysis – net profit margin, asset turnover, and financial leverage – reveals the drivers of this performance.

Net Profit Margin

The net profit margin exhibits considerable volatility. It begins with negative values in 2021 and 2022, at -6.75% and -7.41% respectively, indicating losses during those periods. A modest improvement is seen in 2023, reaching -2.86%, suggesting a reduction in losses. However, the margin declines sharply in 2024 to -17.77% before a dramatic recovery to 2.50% in 2025. This suggests significant operational or financial restructuring occurred between 2024 and 2025.

Asset Turnover

Asset turnover shows a generally increasing trend initially, rising from 0.45 in 2021 to 0.57 in 2023. This indicates improving efficiency in utilizing assets to generate sales. However, a decrease to 0.43 is observed in 2024, potentially linked to the lower profitability experienced that year. The ratio recovers somewhat in 2025, reaching 0.53, but remains below the peak observed in 2023.

Financial Leverage

Financial leverage is not reported for the initial years but registers a substantial value of 30.85 in 2025. This indicates a significant reliance on debt financing. The substantial increase in leverage, combined with the positive net profit margin in the same year, appears to be a primary driver of the high return on equity observed in 2025.

Return on Equity (ROE)

Return on equity is unavailable for the first three years. However, it reaches 40.98% in 2025. This high ROE is a direct consequence of the combination of a positive net profit margin, moderate asset turnover, and, most significantly, high financial leverage. The substantial increase in leverage amplifies the impact of the positive net profit margin on shareholder returns.

In summary, the period demonstrates a turnaround in profitability, culminating in a strong ROE in 2025. This improvement is largely attributable to a recovery in net profit margin and a significant increase in financial leverage, partially offset by fluctuations in asset turnover. The substantial reliance on debt financing in 2025 warrants further investigation to assess associated risks.

The five-component DuPont analysis reveals a significant shift in financial performance between the observed periods. While earlier years have incomplete information, a clear picture emerges from 2023 through 2025, indicating a substantial improvement in Return on Equity (ROE). This improvement is driven by a combination of factors related to profitability, asset utilization, and financial leverage.

Profitability (EBIT Margin)

The EBIT Margin demonstrates considerable volatility. It was negative in 2021 and 2022, at -3.63% and -3.56% respectively, before turning positive in 2023 at 0.61%. However, it experienced a sharp decline in 2024 to -14.24%, followed by a strong recovery to 6.04% in 2025. This suggests significant fluctuations in operational efficiency and cost management.

Asset Turnover

Asset Turnover shows a generally increasing trend, rising from 0.45 in 2021 to 0.49 in 2022 and peaking at 0.57 in 2023. A slight decrease to 0.43 is observed in 2024, but it recovers to 0.53 in 2025. This indicates improving efficiency in utilizing assets to generate sales, although the 2024 dip warrants further investigation.

Financial Leverage

Financial Leverage is not available for the earlier periods but increases substantially to 30.85 in 2025. This indicates a significant increase in the use of debt financing, which amplifies both profits and losses. The substantial increase in leverage in the latest period is a key driver of the increased ROE.

Interest Burden

The Interest Burden is negative in 2023 at -4.19, suggesting income from interest-bearing assets exceeded interest expense. It becomes positive in 2025 at 0.49, indicating interest expense is now higher than income. This change, coupled with the increased financial leverage, suggests a shift in the company’s financing strategy and potentially higher interest costs.

Tax Burden

The Tax Burden is only available for 2025, standing at 0.85. This implies that 85% of pre-tax profits are retained after paying taxes, which is a relatively standard tax rate.

The substantial increase in ROE to 40.98% in 2025 is primarily attributable to the combined effect of improved EBIT Margin, increased Asset Turnover, and significantly higher Financial Leverage. The negative Interest Burden in 2023 is an anomaly, and the subsequent positive value in 2025, alongside the increased leverage, suggests a more conventional debt-financed structure. The volatility in the EBIT Margin remains a point of concern, and continued monitoring is recommended.

The period under review demonstrates significant fluctuations in profitability and efficiency metrics. Return on Assets (ROA) experienced a marked decline initially, followed by a substantial recovery. This movement is attributable to the interplay between Net Profit Margin and Asset Turnover, as detailed below.

Net Profit Margin

The Net Profit Margin exhibited a consistently negative trend from 2021 to 2023, reaching a low of -7.41% in 2022 before a slight improvement to -2.86% in 2023. A dramatic shift occurred in 2024, with the margin plummeting to -17.77%. However, a strong positive reversal is observed in 2025, with the margin reaching 2.50%, indicating a return to profitability.

Asset Turnover

Asset Turnover showed an increasing trend from 2021 to 2023, rising from 0.45 to 0.57. This suggests improving efficiency in utilizing assets to generate sales. In 2024, Asset Turnover decreased to 0.43, potentially indicating a slowdown in sales relative to asset base. A subsequent increase to 0.53 in 2025 suggests a partial recovery in asset utilization.

Return on Assets (ROA)

ROA mirrored the combined effect of the two components. The initial decline from -3.03% in 2021 to -7.56% in 2024 was driven by the consistently negative and worsening Net Profit Margin, despite initial improvements in Asset Turnover. The substantial recovery to 1.33% in 2025 is a direct result of the positive swing in Net Profit Margin, partially offset by a slight decrease in Asset Turnover from its 2023 peak.

The analysis reveals a strong correlation between Net Profit Margin and ROA. While Asset Turnover demonstrates some degree of stability and improvement over the period, the dominant driver of ROA performance is the company’s ability to generate profit on each dollar of sales. The significant volatility observed highlights the sensitivity of overall returns to profitability.

The period demonstrates significant volatility in financial performance, particularly concerning profitability. Return on Assets (ROA) fluctuated considerably, beginning at -3.03% and ultimately reaching 1.33%. This fluctuation is attributable to shifts in the components of the DuPont analysis, specifically the EBIT Margin, Asset Turnover, Interest Burden, and Tax Burden.

EBIT Margin

The EBIT Margin experienced substantial variation. It started at a negative 3.63%, declined slightly to -3.56%, then improved dramatically to 0.61%. However, a significant downturn followed, with the margin falling to -14.24% before recovering to 6.04%. This volatility suggests considerable sensitivity to operational factors or external economic conditions.

Asset Turnover

Asset Turnover exhibited a generally increasing trend, rising from 0.45 to 0.57. A slight decrease to 0.43 was observed before a further increase to 0.53. This indicates improving efficiency in utilizing assets to generate revenue, although the dip in 2024 warrants further investigation.

Interest Burden

The Interest Burden was initially unavailable, then registered at -4.19, indicating a benefit from interest income or a reduction in interest expense. It subsequently became positive at 0.49, suggesting increased interest expense relative to earnings. The negative value in 2023 is unusual and requires further scrutiny to understand its underlying cause.

Tax Burden

The Tax Burden is only available for the final year, registering at 0.85. This suggests that 85% of pre-tax income is retained after tax payments, which is a typical tax rate.

The interplay between these components explains the ROA trend. The initial negative ROA was driven by negative EBIT Margins. The improvement in ROA towards the end of the period was fueled by a combination of a positive EBIT Margin and increasing Asset Turnover, partially offset by the shift in Interest Burden from negative to positive. The substantial swings in ROA highlight the company’s vulnerability to changes in profitability and its ability to efficiently manage its assets and financial obligations.

The period demonstrates significant volatility in profitability metrics. Initial years exhibit negative margins, followed by improvements and subsequent declines before a final recovery. A detailed examination of the components reveals the drivers behind these fluctuations.

Net Profit Margin

The Net Profit Margin initially registers negative values in 2021 and 2022, at -6.75% and -7.41% respectively, indicating net losses. A modest improvement is seen in 2023 with a margin of -2.86%, suggesting a reduction in losses. However, this is followed by a substantial decline in 2024 to -17.77%, representing a significant deterioration in net profitability. The final year, 2025, shows a positive turnaround with a Net Profit Margin of 2.50%, indicating a return to profitability, albeit at a relatively modest level.

EBIT Margin

The EBIT Margin mirrors some of the trends observed in the Net Profit Margin, but with differing magnitudes. It begins at -3.63% in 2021 and -3.56% in 2022. A considerable improvement is noted in 2023, reaching 0.61%, indicating positive earnings before interest and taxes. A sharp decrease occurs in 2024, with the margin falling to -14.24%. The final year shows a strong recovery to 6.04%, suggesting improved operational performance.

Tax Burden

The Tax Burden is only available for 2025, registering at 0.85. This indicates that 85% of pre-tax income is consumed by taxes in that year. Without prior year data, it is difficult to assess the trend or impact of tax obligations on overall profitability.

Interest Burden

The Interest Burden is negative in 2023 at -4.19, suggesting income from interest-related activities exceeding interest expense. This is followed by a positive value in 2025 of 0.49, indicating interest expense exceeding income. The absence of data for 2021 and 2022 prevents a comprehensive assessment of the impact of interest expenses on profitability over the entire period.

The divergence between the EBIT Margin and Net Profit Margin, particularly in 2024, suggests a significant impact from non-operating items, such as interest expense or taxes, on the bottom line. The substantial improvement in both margins in 2025 indicates a positive shift in both operational performance and the management of non-operating factors.