The review of Net Profit Margin witnessed a surging increase, then a decrease. The Net Profit Margin moved from 16.58% in 2019 to 14.84% in 2023.
The average EBIT Margin for the period under analysis was 31.90%, with 2020 and 2023 performing the worst and best, respectively.
In the current year, American Express was able to cover its interest liabilities 2.53 times in the current year- compared to 2019 when it was 3.43 times.
The Asset turnover has stood at 0.23 times in 2023 and 0.21 in 2019, implying an average performance on Assets of the business in relation to revenue.
Profitability
The revenue of American Express has increased and decrease year on year. The revenue increased by 8% between 2019 and 2020 and a decrease of 22% was recorded between 2020 and 2021. There also occurred an increase of 16% between 2022 and 2023 (the current period).
American Express’s performance in profitability looks good as the return on capital employed also recorded good performance during the period of analysis.
Capital Structure
American Express is both equity and debt financed.
The debt-to-equity (D/E) ratio has been falling year on year. The gearing position of the company appears to be high as it stood at 171% in the current year.
