Gross margin has given back roughly 190 basis points from the 2024Q4 peak of 21.0% to 18.4%, while operating margin fell to 9.4%, so the deterioration spans both the manufacturing line and overhead absorption rather than a single non-recurring charge. The 5.8% net margin against a 9.4% operating margin implies conversion of only about 62 cents per operating dollar, which appears consistent with the below-the-line drag already identified in the income statement analysis and that investors should monitor as potentially recurring rather than one-off.

Asset turnover has held in a narrow 0.31-0.33 band across all ten quarters, so the ROIC decline of roughly 200 basis points looks attributable almost entirely to the operating margin contraction, which means the drag is a pricing and cost issue that management could theoretically reverse without additional capital. Because goodwill of about $1.4 billion represents roughly 56% of the $2.5 billion equity base, ROE of 6.2% flatters the return on tangible capital employed, leaving ROIC the more defensible measure of whether Autoliv is genuinely compounding.

Inventory days have been contained in a tight 38-43 range throughout the period, so the cycle's drift upward is driven by receivables rather than stock build, a distinction that points to customer mix or payment terms rather than demand destruction. DPO of 83 days now sits essentially level with DSO of 82 days, implying supplier financing is roughly cash-neutral rather than a source of float, which limits the working-capital cushion available if volumes soften further.

Debt has amortized from $2.4 billion to $2.1 billion while equity stayed near $2.5 billion, so the improvement in D/E appears to reflect genuine repayment rather than book-value accretion, and coverage near 11x should be comfortable by auto-supplier standards. The reported debt-to-EBITDA path of 4.82x to 12.16x to 8.25x over five quarters is unusually volatile and may reflect quarterly EBITDA seasonality rather than a true leverage swing, so annualized figures warrant further investigation before drawing covenant conclusions.

The 11.33x forward multiple sits below every listed peer except Visteon at 10.49x, which suggests the discount is not an isolated anomaly but a sector-wide judgment on margin-challenged suppliers, with Autoliv's 4.4% ROIC trailing Amphenol at 28.3% and Visteon at 19.5%. Read against that return gap, the cheapness may be quality-adjusted rather than mispriced, and the 2.7% dividend yield alongside $500 million of trailing buybacks indicates capital is being returned precisely when the multiple offers little re-rating cushion.