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 Income Statement
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Profitability Ratios (Summary)
Union Pacific Corp., profitability ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| 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: 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 exhibit varied performance over the five-year period. While some indicators demonstrate recovery in later years, an overall trend of initial decline followed by stabilization and modest improvement is apparent.
- Operating Profit Margin
- The operating profit margin decreased from 42.83% in 2021 to 37.65% in 2023, indicating a reduction in operational efficiency or increased operating costs relative to revenue. However, the metric rebounded in the subsequent two years, reaching 40.05% in 2024 and 40.17% in 2025, suggesting a recovery in operational performance.
- Net Profit Margin
- A similar pattern is observed in the net profit margin, declining from 29.92% in 2021 to 26.45% in 2023. This suggests that factors beyond core operations, such as financing costs or taxes, also contributed to the decline in overall profitability. The net profit margin then increased to 27.82% in 2024 and further to 29.12% in 2025, mirroring the improvement in the operating profit margin.
- Return on Equity (ROE)
- Return on equity experienced a more pronounced fluctuation. It rose significantly from 46.06% in 2021 to 57.54% in 2022, potentially due to increased leverage or improved net income. However, ROE then decreased to 43.14% in 2023, followed by further declines to 39.95% in 2024 and 38.65% in 2025. This suggests a diminishing ability to generate profits from shareholder investments.
- Return on Assets (ROA)
- Return on assets remained relatively stable throughout the period, fluctuating within a narrow range. It increased slightly from 10.27% in 2021 to 10.69% in 2022, decreased to 9.50% in 2023, and then recovered to 9.96% in 2024 and 10.24% in 2025. This indicates a consistent, though not exceptional, ability to generate profits from its assets.
In summary, the period began with a decline in profitability, as evidenced by decreasing operating and net profit margins, and a subsequent drop in ROE. The latter half of the period shows signs of stabilization and modest recovery in operating and net profit margins, but ROE continued to decline, while ROA remained relatively consistent.
Return on Sales
Return on Investment
Operating Profit Margin
Union Pacific 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 income | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Transportation | ||||||
| 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 income ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited fluctuations over the five-year period. While operating income generally increased, the operating profit margin did not consistently follow suit, indicating changes in the relationship between revenues and costs.
- Operating Profit Margin Trend
- The operating profit margin began at 42.83% in 2021. A decline was observed in subsequent years, reaching 37.65% in 2023. A recovery then commenced, with the margin increasing to 40.05% in 2024 and further to 40.17% in 2025. This suggests potential cost management improvements or revenue mix shifts in the later years of the period.
- Relationship to Operating Income and Revenues
- Operating income increased from US$9,338 million in 2021 to US$9,846 million in 2025. Operating revenues also increased, moving from US$21,804 million in 2021 to US$24,510 million in 2025. However, the rate of revenue growth outpaced the rate of operating income growth between 2021 and 2023, contributing to the initial decline in the operating profit margin. The margin stabilized and slightly improved in 2024 and 2025 as operating income growth began to align more closely with revenue growth.
The initial decrease in the operating profit margin, followed by the subsequent recovery, warrants further investigation into the underlying cost structure and revenue drivers. The relatively stable margin in the final two years of the period suggests a potential stabilization of these factors.
Net Profit Margin
Union Pacific Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Transportation | ||||||
| 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 ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited fluctuations over the five-year period. While generally remaining within a relatively narrow range, discernible trends are present. Net income increased from 2021 to 2022, then decreased in 2023 before recovering and continuing to increase through 2025. Operating revenues also increased from 2021 to 2022, but experienced a slight decline in 2023, followed by modest growth in 2024 and 2025.
- Net Profit Margin Trend
- The net profit margin began at 29.92% in 2021, representing a strong level of profitability. A decrease was observed in 2022 to 28.13%, followed by a more substantial decline to 26.45% in 2023. This suggests a potential erosion of profitability relative to revenue during this period. A partial recovery occurred in 2024, with the margin increasing to 27.82%. The most recent year, 2025, shows a further increase to 29.12%, approaching the initial level observed in 2021. This indicates a strengthening of profitability in the latter part of the analyzed period.
The relationship between net income and operating revenues suggests that while revenue growth was not consistently strong, the company was able to effectively manage costs and improve profitability, particularly in the final two years of the period. The dip in net profit margin in 2023, despite a slight revenue decrease, warrants further investigation to understand the underlying factors contributing to the reduced profitability. The subsequent recovery in both net income and net profit margin indicates successful corrective actions or favorable market conditions.
- Key Observations
- The net profit margin demonstrates a cyclical pattern over the five years. The highest margin was observed in the initial year, followed by a period of decline and subsequent recovery. The 2025 margin is nearly equivalent to the 2021 margin, suggesting a return to previous levels of profitability.
Overall, the net profit margin demonstrates resilience, with the company demonstrating an ability to recover from a period of reduced profitability. Continued monitoring of these trends will be important to assess the sustainability of the recent improvements.
Return on Equity (ROE)
Union Pacific 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 | ||||||
| Common shareholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| ROE, Sector | ||||||
| Transportation | ||||||
| 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 ÷ Common shareholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The analysis reveals fluctuations in Return on Equity (ROE) over the five-year period. Net income demonstrates a generally increasing trend, while common shareholders’ equity exhibits more variability. These movements collectively influence the observed ROE performance.
- Return on Equity (ROE)
- ROE began at 46.06% in 2021, increasing substantially to 57.54% in 2022. This represents the highest ROE value within the observed timeframe. A subsequent decline is noted, with ROE decreasing to 43.14% in 2023, and continuing downward to 39.95% in 2024. The decline moderates slightly in 2025, with ROE reaching 38.65%.
- Net Income Trend
- Net income increased from US$6,523 million in 2021 to US$6,998 million in 2022. A decrease to US$6,379 million occurred in 2023, followed by a recovery to US$6,747 million in 2024. Net income continued to rise in 2025, reaching US$7,138 million, indicating a generally positive, though not consistently upward, trend.
- Shareholders’ Equity Trend
- Common shareholders’ equity decreased from US$14,161 million in 2021 to US$12,163 million in 2022. A significant increase occurred in 2023, reaching US$14,788 million. This upward trend continued into 2024, with equity rising to US$16,890 million, and further increasing to US$18,467 million in 2025. This demonstrates a consistent expansion of the equity base over the latter part of the period.
The initial increase in ROE in 2022 was likely driven by a combination of increased net income and a decrease in shareholders’ equity. The subsequent decline in ROE, despite generally increasing net income, suggests that the growth in shareholders’ equity outpaced the growth in net income, diluting the return to shareholders. The moderating decline in ROE in 2025 may indicate a stabilization of this relationship.
Return on Assets (ROA)
Union Pacific Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| FedEx Corp. | ||||||
| Uber Technologies Inc. | ||||||
| United Airlines Holdings Inc. | ||||||
| United Parcel Service Inc. | ||||||
| ROA, Sector | ||||||
| Transportation | ||||||
| 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 ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited a generally stable pattern over the five-year period, with some fluctuation. Net income increased from 2021 to 2022, and again from 2024 to 2025, while total assets consistently increased year-over-year. These movements influenced the ROA values observed.
- Overall Trend
- The ROA demonstrated an initial increase followed by a decline and subsequent recovery. It began at 10.27% in 2021, rose to a peak of 10.69% in 2022, then decreased to 9.50% in 2023. A subsequent increase was noted in 2024 (9.96%) and continued into 2025, reaching 10.24%.
- Year-over-Year Changes
- From 2021 to 2022, the ROA increased by 0.42 percentage points, coinciding with growth in both net income and total assets. The most significant decrease occurred between 2022 and 2023, with a drop of 1.19 percentage points. This decline occurred despite an increase in total assets, suggesting that net income growth did not keep pace. The ROA experienced a modest recovery in 2024, increasing by 0.06 percentage points, and continued to improve in 2025, increasing by 0.28 percentage points.
- Relationship to Underlying Components
- The fluctuations in ROA closely mirrored the changes in net income. While total assets consistently increased, the impact of net income on the ROA was more pronounced. The decrease in ROA in 2023 directly correlates with the decrease in net income during that year. The subsequent increases in ROA in 2024 and 2025 align with the corresponding increases in net income.
In summary, the ROA remained within a relatively narrow range throughout the period, indicating consistent, though not dramatically improving, asset utilization in generating profits. The observed fluctuations appear primarily driven by changes in net income rather than substantial shifts in the asset base.