BorgWarner Inc (BWA) Financial Statements

Analyzing BorgWarner through the GoodMoat Quality Indicators reveals a profile with significant strengths and weaknesses. The most compelling positive is the Free Cash Flow (FCF) Yield of 10.4%, which is favourable and suggests strong cash generation relative to its market value. The balance sheet also appears manageable, with a Debt/Equity ratio of 0.72, which is below the framework's cautionary threshold of 1.0x. However, several key quality metrics are unfavourable. Profitability is low, with a Profit Margin of 1.9% and an Operating Margin of 3.7%, which are not indicative of a high-quality, moat-protected business. The Return on Equity (ROE) of 5.1% is well below the framework's target of 15-20% for a high ROIC. From a Growth Assessment perspective, the trajectory is weak. Revenue Growth YoY of 3.9% is far below the double-digit, sustainable growth the framework seeks, and it does not support a high growth CAGR. The P/E of 43.3 is extremely high relative to this minimal growth, indicating the market may be pricing in a significant recovery that is not yet evident in the current financials. In summary, the company shows financial discipline in cash flow and debt management, but its core operating profitability and growth engine are currently under pressure.