United Rentals Inc. (NYSE:URI)

Return on Assets (ROA)

The Return on Assets demonstrated fluctuations over the five-year period. Starting at 6.04% in 2018, it experienced a slight increase in 2019 to 6.19%, followed by a decline to 4.98% in 2020. Subsequent years showed an upward trend, with ROA rising to 6.83% in 2021 and reaching its highest point at 8.7% in 2022. This pattern indicates improved efficiency in asset utilization, particularly after 2020.

Financial Leverage

Financial leverage showed a consistent decline from 2018 through 2021, decreasing from 5.33 in 2018 to 3.39 in 2021. In 2022, the ratio stabilized with a slight increase to 3.42. This declining trend suggests a progressive reduction in the company's reliance on debt financing relative to equity, indicating potentially lower financial risk until stabilization in the latest year.

Return on Equity (ROE)

Return on Equity revealed a downward trend from 32.21% in 2018 to 19.58% in 2020, marking the lowest point in the period. Following this, there was a recovery to 23.13% in 2021 and a further increase to 29.81% in 2022. Despite the dip during 2019-2020, the resurgence in the latter years suggests enhanced profitability on shareholders' equity.

The financial performance exhibits several notable trends over the five-year period under review.

Net Profit Margin

The net profit margin showed a downward trend from 13.62% in 2018 to 10.43% in 2020, indicating a reduction in profitability during these years. However, this trend reversed thereafter, with the margin increasing significantly to 14.27% in 2021 and further to 18.08% in 2022. This improvement suggests enhanced cost efficiency or increased revenue relative to expenses in the most recent years.

Asset Turnover

The asset turnover ratio was relatively stable across the period, starting at 0.44 in 2018 and slightly increasing to 0.49 in 2019. It then remained flat at around 0.48 through 2020 to 2022. This stability indicates consistent efficiency in utilizing assets to generate sales over the five years.

Financial Leverage

Financial leverage exhibited a declining trend from 5.33 in 2018 to 3.39 in 2021, reflecting a reduction in the use of debt relative to equity. A minor increase to 3.42 in 2022 was observed, but the overall pattern indicates a strategy towards lower leverage, possibly to reduce financial risk or optimize capital structure.

Return on Equity (ROE)

The return on equity followed a somewhat volatile trajectory. It decreased markedly from 32.21% in 2018 to 19.58% in 2020, in line with the drop in net profit margin and leverage. Subsequently, ROE rebounded to 23.13% in 2021 and further improved to 29.81% in 2022. This recovery aligns with improved profitability and controlled leverage, suggesting more effective equity utilization in the latter years.

Tax Burden

The tax burden ratio remained relatively stable over the period, fluctuating slightly between 0.74 and 0.78. This stability indicates consistent effective tax rates impacting the company's profitability.

Interest Burden

The interest burden ratio showed a declining trend from 0.75 in 2018 to 0.63 in 2020, indicating increasing interest expense relative to earnings before interest and taxes during that period. However, from 2021 onwards, a notable improvement occurred, with the ratio rising to 0.81 and then 0.86 by 2022, suggesting a reduction in interest expense or stronger operational earnings coverage.

EBIT Margin

The EBIT margin exhibited some volatility, decreasing from 24.32% in 2018 to a low of 21.2% in 2020. It then improved significantly in the following years, reaching 27.89% in 2022, the highest in the observed timeframe. This upward trend in recent years points to enhanced operational efficiency or better pricing power.

Asset Turnover

Asset turnover remained fairly consistent, oscillating slightly between 0.44 and 0.49. This suggests the company's asset utilization in generating revenue remained stable, without significant improvements or deteriorations.

Financial Leverage

Financial leverage showed a clear downward trend, decreasing from 5.33 in 2018 to 3.39 in 2021, with a slight uptick to 3.42 in 2022. The reduction in leverage indicates a strategic effort to reduce reliance on debt or a change in capital structure aimed at lowering financial risk.

Return on Equity (ROE)

ROE followed a declining pattern from 32.21% in 2018 to 19.58% in 2020, reflecting challenges during those years, possibly linked to higher interest burdens and lower EBIT margins. It then recovered to 29.81% by 2022, aligning with improvements in operating performance and a more favorable interest burden, though it has not fully reached the earlier peak levels.

Net Profit Margin

The net profit margin showed a fluctuating trend over the analyzed periods. It started at 13.62% in 2018, decreased over the following two years to reach a low of 10.43% in 2020, then improved significantly in the subsequent years, rising to 14.27% in 2021 and further to 18.08% in 2022. This indicates a recovery and strengthening in profitability relative to sales after a dip in 2019 and 2020.

Asset Turnover

The asset turnover ratio exhibited stability throughout the five years. Starting at 0.44 in 2018, it increased slightly to 0.49 in 2019, followed by a slight dip to 0.48 in 2020 and remained consistent at 0.48 for the years 2021 and 2022. This suggests that the efficiency in using assets to generate revenue has been relatively steady with marginal variations.

Return on Assets (ROA)

The return on assets demonstrated a pattern similar to net profit margin, with a decrease from 6.04% in 2018 to a low of 4.98% in 2020. Post-2020, ROA improved distinctly, reaching 6.83% in 2021 and further increasing to 8.7% in 2022. This trend reflects an enhancement in overall asset profitability, indicating better management of the company’s asset base to generate earnings after 2020.

Tax Burden

The tax burden ratio remained relatively stable over the five-year period, fluctuating slightly between 0.74 and 0.78. It showed a small increase from 0.74 in 2018 to 0.78 in 2019 and 2020, then decreased back to 0.75 in both 2021 and 2022, indicating consistent tax expense management relative to pre-tax earnings.

Interest Burden

The interest burden ratio exhibited notable variability, declining from 0.75 in 2018 to a low of 0.63 in 2020, reflecting increased interest expenses relative to earnings before interest and taxes during that period. However, this trend reversed in the subsequent years, with the ratio improving to 0.81 in 2021 and further to 0.86 in 2022, suggesting reduced interest impact and potentially lower financial leverage or more favorable financing terms.

EBIT Margin

The EBIT margin demonstrated a generally positive trend after an initial decline. Starting at 24.32% in 2018, it decreased to 23.12% in 2019 and further to 21.20% in 2020, which may reflect margin pressures or cost challenges. In 2021, the margin improved to 23.36%, and the improvement accelerated in 2022, reaching 27.89%, indicating enhanced operating efficiency and profitability.

Asset Turnover

Asset turnover ratio showed relative stability throughout the period, with a slight increase from 0.44 in 2018 to 0.49 in 2019, followed by minor fluctuations, maintaining around 0.48 from 2020 through 2022. This suggests steady utilization of assets in generating revenue without significant changes in operational capacity or asset efficiency.

Return on Assets (ROA)

Return on assets followed a somewhat cyclical path with an overall upward movement. Starting at 6.04% in 2018, ROA increased slightly to 6.19% in 2019 but declined to 4.98% in 2020, indicating a dip in profitability. Subsequently, it rebounded strongly to 6.83% in 2021 and further improved to 8.7% in 2022, signaling enhanced overall profitability and effective asset utilization in recent years.

Tax Burden

The tax burden ratio remained fairly stable over the observed period, fluctuating slightly between 0.74 and 0.78. This consistency indicates a relatively steady relationship between pre-tax and after-tax income, suggesting stable tax expenses relative to earnings before taxes.

Interest Burden

The interest burden ratio experienced notable variability, decreasing from 0.75 in 2018 to a low of 0.63 in 2020, indicating higher interest expenses relative to EBIT during this period. However, the ratio improved substantially afterward, reaching 0.86 in 2022, which reflects a reduction in interest costs or improved EBIT coverage of interest expenses.

EBIT Margin

The EBIT margin showed a downward trend from 24.32% in 2018 to a low of 21.2% in 2020, likely reflecting operational challenges or increased expenses during that period. Following this, a recovery occurred with margins rising to 27.89% by 2022, surpassing the initial 2018 level and indicating improved operational efficiency or favorable business conditions.

Net Profit Margin

Net profit margin declined from 13.62% in 2018 to 10.43% in 2020, mirroring trends seen in EBIT margin and interest burden, suggesting diminished profitability. Subsequently, the margin increased significantly to 18.08% by 2022, marking a strong recovery and enhanced bottom-line profitability. This improvement aligns with better interest burden and EBIT margin outcomes, indicating overall financial strengthening.