Bed Bath & Beyond Inc. (NASDAQ:BBBY)

Return on Assets (ROA)

The ROA shows a declining trend over the periods analyzed. Starting at a positive 10.01% in early 2017, it decreased to 6.03% in 2018, then turned negative in 2019 at -2.09%, and continued to deteriorate further to -10.91% by early 2022. This downward trend indicates decreasing efficiency in the company's asset utilization to generate profits.

Financial Leverage

Financial leverage remained relatively stable around 2.5 times from 2017 through 2019 but increased significantly starting in 2020, rising to 4.41, then 5.06 in 2021, and dramatically escalating to 29.46 times by 2022. This sharp increase suggests a substantial rise in the company's use of debt financing, potentially increasing financial risk.

Return on Equity (ROE)

ROE followed a similar downward trajectory as ROA but with greater volatility. It started at a strong positive 25.19% in 2017, fell to 14.71% in 2018, and became negative in 2019 at -5.36%. The negative trend intensified, reaching -34.78% in 2020, -11.81% in 2021, and plummeting to an extreme negative value of -321.35% by 2022. This sharp decline alongside increased financial leverage indicates considerable erosion of shareholder value and heightened financial distress.

Net Profit Margin

The net profit margin exhibited a declining trend over the observed period. Initially, the margin was positive at 5.61% in early 2017 but decreased steadily thereafter, turning negative in 2019. The margin reached its lowest point in 2022 at -7.11%, indicating increasing challenges in profitability.

Asset Turnover

Asset turnover showed relative stability with minor fluctuations. It started at 1.78 in 2017, slightly decreased to 1.75 in 2018, then peaked at 1.83 in 2019. A notable decline occurred in 2020 to 1.43, where it remained steady through 2021, followed by a moderate recovery to 1.53 in 2022. This suggests a general decrease in the efficiency of asset use during the pandemic period, with some improvement afterward.

Financial Leverage

Financial leverage increased significantly throughout the period. It held relatively stable values between 2.44 and 2.57 from 2017 to 2019, then experienced a sharp rise from 4.41 in 2020 to an exceptional 29.46 in 2022. This large increase indicates a substantial increase in the use of debt financing, particularly in the latest year.

Return on Equity (ROE)

ROE declined markedly over the years, reflecting deteriorating profitability relative to shareholder equity. The ROE started strongly at 25.19% in 2017, dropped to 14.71% in 2018, then moved into negative territory from 2019 onward. The decrease was especially pronounced in 2020 and 2022, with ROE values of -34.78% and -321.35%, respectively, corresponding with the high financial leverage and negative net profit margins.

The financial analysis over the six-year period reveals significant fluctuations and concerning trends in key performance indicators. The tax burden and interest burden ratios are only available for the first two years, with both showing a slight decline, indicating a marginally reduced impact of taxes and interest on earnings during that time frame.

EBIT Margin

The EBIT margin experienced a steady and pronounced decline from 9.29% in 2017 to a negative 5.19% in 2022. This trend indicates deteriorating operating profitability, with the margin turning negative starting in 2019, reflecting operational losses that intensified through to 2022.

Asset Turnover

Asset turnover remained relatively stable in the earlier years, fluctuating slightly around 1.75 to 1.83, but dropped noticeably to 1.43 in 2020 and 2021 before a moderate recovery to 1.53 in 2022. This suggests a decline in the efficiency of asset utilization in generating revenue during the pandemic years, followed by a modest improvement.

Financial Leverage

Financial leverage was relatively stable at around 2.5 in the first three years but then increased sharply, escalating from 4.41 in 2020 to 5.06 in 2021, and dramatically surging to 29.46 in 2022. This substantial increase signals a significant rise in debt levels or reliance on borrowed funds, which could heighten financial risk.

Return on Equity (ROE)

ROE showed a severe downward trajectory, beginning at a robust 25.19% in 2017 and declining to a negative -321.35% by 2022. Negative ROE values from 2019 onwards reveal substantial equity erosion and consistent losses, with the 2022 figure particularly alarming, likely driven by the combination of poor profitability and heightened financial leverage.

Overall, the data depicts a company facing escalating operational challenges, declining profitability, deteriorating asset efficiency, and rising financial risk due to increased leverage. The corresponding fiscal returns have become negative, underscoring the need for strategic interventions to stabilize and improve financial performance.

The analysis of the financial ratios over the six-year period reveals notable fluctuations and declining trends in profitability and asset efficiency.

Net Profit Margin

The net profit margin demonstrates a consistent downward trajectory. Starting at a positive 5.61% in 2017, it decreased to 3.44% in 2018 and turned negative in 2019 at -1.14%. This negative trend deepened over the subsequent years, reaching -7.11% by 2022. This indicates increasing challenges in generating profit from sales over time, with losses widening particularly from 2020 onward.

Asset Turnover

The asset turnover ratio, reflecting how efficiently assets are utilized to generate sales, remained relatively stable but showed a slight decline from 1.78 in 2017 to 1.43 in 2020 and 2021. A minor recovery to 1.53 occurred in 2022 but did not reach prior levels. This pattern indicates a modest reduction in asset utilization efficiency during the period, with some improvement in the most recent year.

Return on Assets (ROA)

Return on assets follows a pattern similar to the net profit margin. It declined from a healthy 10.01% in 2017 to 6.03% in 2018, then dropped sharply into negative territory from 2019 onward. The ROA decreased from -2.09% in 2019 to a low of -10.91% in 2022, highlighting significant deterioration in the company’s ability to generate returns from its asset base.

Overall, these metrics point to worsening profitability and efficiency in asset use over the analyzed period. The negative returns and declining margins from 2019 onward suggest operational or market challenges impacting financial performance. Slight improvement in asset turnover in 2022 does not offset the broader adverse trends in profitability ratios.

Tax Burden

The tax burden ratio shows a slight decrease from 0.64 in February 2017 to 0.61 in March 2018. Data beyond this period is not available for further analysis.

Interest Burden

Interest burden also decreased marginally from 0.94 in February 2017 to 0.91 in March 2018, with no subsequent data to assess continuing trends.

EBIT Margin

The EBIT margin demonstrates a clear downward trend over the six-year interval. It started at a positive 9.29% in February 2017 but significantly declined to a negative margin by February 2019 (-0.72%). The negative tendency intensified through subsequent years, reaching -6.27% in 2020, slightly improving but remaining negative at -2.81% in 2021, and dipping again to -5.19% in 2022. This pattern indicates diminishing operational profitability over time.

Asset Turnover

Asset turnover remained relatively stable initially, moving slightly from 1.78 in February 2017 to 1.83 in March 2019. However, a notable decline is observed in 2020 and 2021 with values dropping to 1.43, followed by a slight recovery to 1.53 in 2022. This suggests a temporary reduction in the efficiency of using assets to generate revenue, with some improvement in the most recent year.

Return on Assets (ROA)

Return on assets experienced a substantial decline over the analyzed period. From a positive 10.01% in February 2017, ROA dropped to 6.03% in 2018, then turned negative at -2.09% in 2019. The decline deepened reaching -7.88% in 2020, with fluctuations at -2.34% in 2021 and further negative decline to -10.91% in 2022. This pattern reflects deteriorating overall profitability and asset efficiency, correlating with the negative EBIT margins reported.

Tax Burden

The tax burden ratio declined slightly from 0.64 in 2017 to 0.61 in 2018. Data for subsequent years is unavailable, preventing further trend analysis on this metric.

Interest Burden

The interest burden ratio exhibited a minor decrease, moving from 0.94 in 2017 to 0.91 in 2018. No data exists beyond 2018 for this ratio to assess longer-term changes.

EBIT Margin

There is a clear downward trend in the EBIT margin over the period analyzed. Starting at 9.29% in 2017, it decreased to 6.16% in 2018 and then sharply turned negative at -0.72% in 2019. This deterioration intensified in 2020 with the margin reaching -6.27%, followed by some slight recovery to -2.81% in 2021, and a decline again to -5.19% in 2022. The data indicates increasing operational challenges impacting core profitability over these years.

Net Profit Margin

Net profit margin trends mirror those of the EBIT margin, showing a steady decline from 5.61% in 2017 to 3.44% in 2018. The margin turned negative in 2019 at -1.14%, worsened significantly to -5.5% in 2020, showed a moderate recovery to -1.63% in 2021, but declined again to -7.11% in 2022. This pattern suggests that net profitability was under sustained pressure, with losses deepening after 2018 and only temporary partial recovery in 2021.