Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
United Rentals Inc., profitability ratios
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).
The financial data reveals several noteworthy trends in profitability and returns over the five-year period analyzed.
- Gross Profit Margin
- The gross profit margin experienced a decline from 41.8% in 2018 to a low of 37.32% in 2020, indicating some compression in the core profitability of sales. However, starting in 2021, the margin showed a recovery, rising to 39.66% and further improving to 42.91% by the end of 2022. This suggests an enhanced ability to manage production or procurement costs relative to revenue in the later years.
- Operating Profit Margin
- A similar pattern is evident in the operating profit margin, which decreased from 24.25% in 2018 to 21.1% in 2020, reflecting increased operating expenses or reduced operating efficiency during those years. Subsequently, the margin improved to 23.44% in 2021 and saw a significant increase to 27.76% in 2022. This progression points to improved operational control and potentially better cost management or higher operational leverage.
- Net Profit Margin
- The net profit margin declined from 13.62% in 2018 to 10.43% in 2020, demonstrating reduced overall profitability after all expenses and taxes. From 2020 onward, the margin increased notably, reaching 14.27% in 2021 and 18.08% in 2022. This strong rebound indicates improvements not only in core operations but possibly also in financial management, tax strategies, or other non-operating income components.
- Return on Equity (ROE)
- The return on equity started at a robust 32.21% in 2018 and slightly declined to 30.65% in 2019. A sharp drop occurred in 2020, falling to 19.58%, signifying a considerable reduction in the efficiency of generating profits from shareholders' equity during that challenging year. The ROE recovered to 23.13% in 2021 and further to 29.81% in 2022, reflecting improved profitability and possibly enhanced equity utilization.
- Return on Assets (ROA)
- The return on assets was relatively stable around 6% in 2018 and 2019 but fell to 4.98% in 2020. This decline suggests less efficient asset utilization or lower asset-generated income during that period. The ratio then improved significantly in subsequent years, reaching 6.83% in 2021 and 8.7% in 2022, indicating more effective asset use or higher returns generated from the assets deployed.
Overall, the data portrays a dip in profitability and returns in 2020 across multiple key metrics, likely reflecting operational or market challenges. However, subsequent years show a strong recovery trend, with consistent improvement continuing into 2022, highlighting successful efforts to restore and enhance financial performance and efficiency.
Return on Sales
Return on Investment
Gross Profit Margin
United Rentals Inc., gross 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 millions) | ||||||
| Gross profit | 4,996) | 3,853) | 3,183) | 3,670) | 3,364) | |
| Revenues | 11,642) | 9,716) | 8,530) | 9,351) | 8,047) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 42.91% | 39.66% | 37.32% | 39.25% | 41.80% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Boeing Co. | 5.26% | 4.84% | -9.78% | — | — | |
| Caterpillar Inc. | 26.91% | 26.30% | 25.47% | — | — | |
| Eaton Corp. plc | 33.19% | 32.28% | 30.52% | — | — | |
| GE Aerospace | 24.55% | 24.19% | 17.26% | — | — | |
| Honeywell International Inc. | 36.99% | 35.85% | 32.07% | — | — | |
| Lockheed Martin Corp. | 12.56% | 13.52% | 13.23% | — | — | |
| RTX Corp. | 20.38% | 19.40% | 15.08% | — | — | |
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
Gross profit margin = 100 × Gross profit ÷ Revenues
= 100 × 4,996 ÷ 11,642 = 42.91%
2 Click competitor name to see calculations.
- Revenue Trend
- Revenues demonstrate a generally increasing trend over the five-year period. Starting at $8,047 million in 2018, revenues rose to $9,351 million in 2019, followed by a decline to $8,530 million in 2020. Subsequently, revenues increased again, reaching $9,716 million in 2021 and further climbing to $11,642 million in 2022. This indicates resilience and recovery after a dip in 2020.
- Gross Profit Trend
- Gross profit mirrors the revenue pattern with an initial increase from $3,364 million in 2018 to $3,670 million in 2019, then a decrease to $3,183 million in 2020. From 2020 onwards, gross profit experienced substantial growth, moving to $3,853 million in 2021 and surging to $4,996 million in 2022. The growth especially in 2022 is notable and suggests improved profitability.
- Gross Profit Margin Trend
- The gross profit margin shows some variability. It declined from 41.8% in 2018 to 39.25% in 2019, and further to 37.32% in 2020, indicating reduced efficiency or increased cost pressures during this period. However, gross profit margin then improved to 39.66% in 2021 and increased further to 42.91% in 2022, surpassing the 2018 level. This improvement suggests enhanced cost management or pricing power in recent years.
- Overall Insights
- The data reflects a temporary setback in 2020, potentially due to external factors affecting demand or costs. Despite this, the company recovered strongly in 2021 and 2022 with both revenues and gross profit surpassing previous highs. Margins have also improved significantly in the latter period, indicating better operational efficiency and profitability. The upward momentum in 2022 is particularly strong, showing robust financial health and growth prospects.
Operating Profit Margin
United Rentals Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 3,232) | 2,277) | 1,800) | 2,152) | 1,951) | |
| Revenues | 11,642) | 9,716) | 8,530) | 9,351) | 8,047) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 27.76% | 23.44% | 21.10% | 23.01% | 24.25% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Boeing Co. | -5.33% | -4.66% | -21.95% | — | — | |
| Caterpillar Inc. | 13.97% | 14.27% | 11.67% | — | — | |
| Eaton Corp. plc | 14.55% | 15.69% | 11.45% | — | — | |
| GE Aerospace | 6.05% | 8.58% | 5.49% | — | — | |
| Honeywell International Inc. | 18.12% | 18.03% | 17.45% | — | — | |
| Lockheed Martin Corp. | 12.65% | 13.61% | 13.22% | — | — | |
| RTX Corp. | 8.07% | 7.70% | -3.34% | — | — | |
| Operating Profit Margin, Sector | ||||||
| Capital Goods | 8.29% | 9.11% | 3.00% | — | — | |
| Operating Profit Margin, Industry | ||||||
| Industrials | 9.06% | 9.24% | 3.13% | — | — | |
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 ÷ Revenues
= 100 × 3,232 ÷ 11,642 = 27.76%
2 Click competitor name to see calculations.
- Revenue Trends
- The revenue exhibited an overall upward trend from 2018 to 2022. It increased from $8,047 million in 2018 to $9,351 million in 2019, then decreased to $8,530 million in 2020. Revenues recovered and grew consecutively in 2021 and 2022, reaching $9,716 million and $11,642 million, respectively. This indicates a strong rebound and robust growth particularly in the last two years of the period analyzed.
- Operating Income Analysis
- Operating income followed a somewhat similar trajectory to revenues but with more pronounced fluctuations. It rose from $1,951 million in 2018 to $2,152 million in 2019, then declined to $1,800 million in 2020. Subsequently, operating income increased significantly in 2021 and 2022, reaching $2,277 million and $3,232 million, respectively. The substantial increase in operating income in 2022 suggests enhanced operational efficiency or improved cost management alongside revenue growth.
- Operating Profit Margin Insights
- The operating profit margin showed variation over the five-year period. Starting at 24.25% in 2018, it decreased to 23.01% in 2019 and further declined to 21.1% in 2020, reflecting the impact of lower profitability during that year. Since 2020, the margin has improved, rising to 23.44% in 2021 and sharply increasing to 27.76% in 2022. This upward trend in profit margin indicates an improvement in profitability relative to revenues, which may be attributed to operational efficiencies, pricing strategies, or cost control measures implemented by the company.
- Summary
- The financial performance over the period demonstrates resilience and recovery from the dip in 2020, with both revenues and operating income rebounding strongly in 2021 and 2022. The growth in operating profit margin in 2022 points to an enhanced ability to convert revenue into profit, suggesting solid operational improvements or favorable market conditions during the most recent year. Overall, the data reveals a positive progression in financial health towards the end of the period analyzed.
Net Profit Margin
United Rentals Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 2,105) | 1,386) | 890) | 1,174) | 1,096) | |
| Revenues | 11,642) | 9,716) | 8,530) | 9,351) | 8,047) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 18.08% | 14.27% | 10.43% | 12.55% | 13.62% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Boeing Co. | -7.41% | -6.75% | -20.42% | — | — | |
| Caterpillar Inc. | 11.85% | 13.47% | 7.68% | — | — | |
| Eaton Corp. plc | 11.86% | 10.92% | 7.90% | — | — | |
| GE Aerospace | 0.31% | -9.17% | 7.81% | — | — | |
| Honeywell International Inc. | 14.00% | 16.11% | 14.64% | — | — | |
| Lockheed Martin Corp. | 8.69% | 9.42% | 10.45% | — | — | |
| RTX Corp. | 7.75% | 6.00% | -6.22% | — | — | |
| Net Profit Margin, Sector | ||||||
| Capital Goods | 5.27% | 3.71% | 1.85% | — | — | |
| Net Profit Margin, Industry | ||||||
| Industrials | 5.04% | 5.85% | 0.09% | — | — | |
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 ÷ Revenues
= 100 × 2,105 ÷ 11,642 = 18.08%
2 Click competitor name to see calculations.
- Revenue Trend
- The revenue showed an overall upward trend from 2018 to 2022, starting at $8,047 million in 2018 and rising to $11,642 million in 2022. Following a slight decline in 2020 to $8,530 million, revenues recovered strongly in subsequent years, reaching the highest reported figure in 2022.
- Net Income Development
- Net income experienced some fluctuations during the period. It increased from $1,096 million in 2018 to $1,174 million in 2019, then declined notably to $890 million in 2020. Afterward, there was a substantial increase to $1,386 million in 2021 and a significant jump to $2,105 million in 2022, the highest value in the period analyzed.
- Net Profit Margin Analysis
- The net profit margin generally reflected the changes seen in net income relative to revenue. It started at 13.62% in 2018, dipped to its lowest of 10.43% in 2020, then improved significantly in 2021 to 14.27%, and reached a peak of 18.08% in 2022, indicating increased profitability relative to revenues in the most recent year.
- Overall Insights
- The data indicates resilience and growth after the downturn in 2020, with revenues and net income recovering strongly. The improvement in net profit margin suggests enhanced efficiency or cost management contributing to better profitability. The 2022 figures demonstrate a particularly strong financial performance compared to previous years.
Return on Equity (ROE)
United Rentals Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | 2,105) | 1,386) | 890) | 1,174) | 1,096) | |
| Stockholders’ equity | 7,062) | 5,991) | 4,545) | 3,830) | 3,403) | |
| Profitability Ratio | ||||||
| ROE1 | 29.81% | 23.13% | 19.58% | 30.65% | 32.21% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Boeing Co. | — | — | — | — | — | |
| Caterpillar Inc. | 42.25% | 39.37% | 19.56% | — | — | |
| Eaton Corp. plc | 14.45% | 13.06% | 9.44% | — | — | |
| GE Aerospace | 0.62% | -16.17% | 16.04% | — | — | |
| Honeywell International Inc. | 29.74% | 29.85% | 27.23% | — | — | |
| Lockheed Martin Corp. | 61.86% | 57.62% | 113.60% | — | — | |
| RTX Corp. | 7.16% | 5.29% | -4.88% | — | — | |
| ROE, Sector | ||||||
| Capital Goods | 13.39% | 8.48% | 4.42% | — | — | |
| ROE, Industry | ||||||
| Industrials | 15.38% | 15.38% | 0.24% | — | — | |
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 ÷ Stockholders’ equity
= 100 × 2,105 ÷ 7,062 = 29.81%
2 Click competitor name to see calculations.
- Net Income
- Net income exhibited variability over the analyzed period. From 2018 to 2019, there was a moderate increase from 1096 million USD to 1174 million USD. However, a decline was observed in 2020, dropping to 890 million USD. Subsequently, net income rebounded significantly in 2021 and 2022, reaching 1386 million USD and further growing to 2105 million USD. This indicates a recovery and strong growth momentum in the latter years.
- Stockholders' Equity
- Stockholders’ equity demonstrated a consistent upward trend throughout the five years. Starting at 3403 million USD in 2018, it increased steadily each year, reaching 7062 million USD by the end of 2022. This consistent growth suggests ongoing capital accumulation and strengthening of the equity base.
- Return on Equity (ROE)
- The return on equity showed some fluctuation over the period. It started at a high level of 32.21% in 2018, followed by a slight decrease to 30.65% in 2019. There was a more pronounced decline in 2020 to 19.58%, likely reflecting the downturn in net income. ROE recovered in 2021 and 2022 to 23.13% and 29.81%, respectively, approaching the higher levels observed at the beginning of the period. This indicates improved profitability relative to shareholders’ equity in recent years.
Return on Assets (ROA)
United Rentals 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 millions) | ||||||
| Net income | 2,105) | 1,386) | 890) | 1,174) | 1,096) | |
| Total assets | 24,183) | 20,292) | 17,868) | 18,970) | 18,133) | |
| Profitability Ratio | ||||||
| ROA1 | 8.70% | 6.83% | 4.98% | 6.19% | 6.04% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Boeing Co. | -3.60% | -3.03% | -7.80% | — | — | |
| Caterpillar Inc. | 8.18% | 7.84% | 3.83% | — | — | |
| Eaton Corp. plc | 7.03% | 6.30% | 4.43% | — | — | |
| GE Aerospace | 0.12% | -3.28% | 2.25% | — | — | |
| Honeywell International Inc. | 7.97% | 8.60% | 7.40% | — | — | |
| Lockheed Martin Corp. | 10.84% | 12.41% | 13.47% | — | — | |
| RTX Corp. | 3.27% | 2.39% | -2.17% | — | — | |
| ROA, Sector | ||||||
| Capital Goods | 2.84% | 1.86% | 0.80% | — | — | |
| ROA, Industry | ||||||
| Industrials | 3.31% | 3.40% | 0.04% | — | — | |
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 × 2,105 ÷ 24,183 = 8.70%
2 Click competitor name to see calculations.
- Net Income
- The net income demonstrates a general upward trend over the five-year period, starting at $1096 million in 2018 and increasing to $2105 million by the end of 2022. Notably, there was a decline in 2020 to $890 million, likely attributable to external market or economic factors, followed by significant recovery and growth in subsequent years.
- Total Assets
- Total assets show a steady increase from $18,133 million in 2018 to $24,183 million in 2022, with a slight dip observed in 2020 to $17,868 million. The rise in assets from 2020 onward suggests active investment or asset acquisition, reflecting an expanding asset base supporting company operations and growth.
- Return on Assets (ROA)
- ROA follows a similar pattern to net income, beginning at 6.04% in 2018, with a marginal increase to 6.19% in 2019, then decreasing to 4.98% in 2020. The ratio improved notably in 2021 and 2022, reaching 8.7%, indicating enhanced efficiency in the utilization of assets to generate profit during the latter years.
- Overall Trends
- The combination of increasing net income and total assets, alongside an improved ROA in the most recent years, suggests improved operational performance and asset management. The dip occurring in 2020 across all metrics was followed by recovery and accelerated growth, indicating resilience and effective strategic responses during that period.