Kraft Foods Group Inc. (NASDAQ:KRFT)

Return on Assets (ROA)

The ROA shows an increasing trend starting from 7.04% in March 2012 and peaking at 11.87% in June 2014. Following this peak, there is a noticeable decline reaching 4.15% by March 2015. This pattern indicates improved asset efficiency up until mid-2014, followed by a significant reduction in the subsequent quarters.

Financial Leverage

Financial leverage exhibited a sharp upward movement from 1.28 in March 2012 to a peak of 6.53 in December 2012. Subsequently, leverage steadily decreased to around 4.08 by September 2014. However, it increased again to 5.12 by March 2015. This suggests an initial substantial increase in the use of debt or other leverage, followed by deleveraging, but with a recent rise in leverage levels toward the end of the period.

Return on Equity (ROE)

The ROE indicates strong performance from 45.97% in March 2012 with some fluctuations, reaching a high of 52.34% in March 2014. Following this peak, a decline is observed, with ROE dropping to 21.23% by March 2015. The trend aligns with the ROA pattern, illustrating a peak in profitability and shareholder returns around early 2014, followed by a deterioration in the following quarters.

Net Profit Margin

The net profit margin shows a generally increasing trend from March 2012 through the end of 2013, rising from 8.95% to a peak of 15.34% in the second quarter of 2014. However, starting with the last quarter of 2014 and into early 2015, there is a noticeable decline, with margins dropping sharply to around 5.27% by March 2015. This pattern suggests improved profitability through 2013 and mid-2014, followed by a significant reduction in profit margins thereafter.

Asset Turnover

The asset turnover ratio remains remarkably stable throughout the entire period, fluctuating narrowly around 0.78 to 0.79. This consistency indicates a steady efficiency in using assets to generate revenue, with no significant improvements or deteriorations observed.

Financial Leverage

Financial leverage displays considerable volatility over the observed quarters. Starting low at 1.28 in early 2012, it rises sharply to a high of 6.53 by December 2012. Thereafter, the ratio gradually decreases through late 2013 and 2014, reaching around 4.08 by the third quarter of 2014. A slight increase is observed near the end of 2014 and early 2015, peaking at 5.26 before falling marginally to 5.12 in the last reported period. These fluctuations indicate changes in the company's debt level or equity base, with a peak in leverage around late 2012 before a reduction and subsequent moderate increase.

Return on Equity (ROE)

Return on equity follows a trend broadly similar to net profit margin but with higher volatility and more pronounced changes. ROE increases sharply from approximately 46% in early 2012 to above 50% in the first half of 2014, suggesting strong profitability relative to shareholder equity during this time. After mid-2014, ROE declines significantly, falling to about 21.23% by March 2015. This decline likely reflects the drop in net profit margin and changing financial leverage, indicating less efficient use of equity capital in the most recent period.

The analysis of the provided financial metrics reveals several notable trends in profitability, operational efficiency, and financial structure over the observed periods.

Tax Burden

The tax burden ratio shows a gradual increase from 0.66 in the end of 2012 to 0.77 by the first quarter of 2015. This indicates a rising proportion of earnings being paid as taxes over time, which may impact net profitability adversely.

Interest Burden

The interest burden ratio generally decreases across the periods, starting around 0.9 and dropping to approximately 0.72 by early 2015. This trend suggests an increasing interest expense relative to earnings before interest and taxes, indicating either higher debt costs or increased leverage impacting interest payments.

EBIT Margin

The EBIT margin experiences a significant fluctuation. It initially rises sharply from about 14.78% in early 2012 to a peak of 25.94% in mid-2014, indicating improved operational profitability. However, it declines steeply thereafter, reaching around 9.49% in the first quarter of 2015.

Asset Turnover

Asset turnover remains relatively stable throughout the period, fluctuating narrowly around 0.78 to 0.79. This stability suggests consistent efficiency in generating sales from assets without significant operational changes.

Financial Leverage

Financial leverage increases sharply from about 1.28 at the start of the period to a peak of 6.53 by the end of 2012 before gradually declining to about 4.08 in late 2014. It then rises again to slightly above 5.0 in early 2015. This indicates a period of increased reliance on debt financing followed by partial deleveraging, then a slight increase again.

Return on Equity (ROE)

ROE peaks around 45.97% in early 2013 and maintains a relatively high level above 40% until late 2014, reflecting strong profitability relative to shareholder equity. However, it declines drastically to approximately 21.23% by early 2015, following the trend of decreasing EBIT margin and increasing tax and interest burdens.

Overall, the data illustrates a period where improved operational performance and higher leverage initially drove strong returns on equity, followed by a phase of deteriorating profitability and increasing costs related to tax and interest expenses. The declining EBIT margin and ROE in early 2015 suggest challenges impacting earnings quality despite stable asset utilization.

Net Profit Margin

The net profit margin exhibits a clear upward trend from March 2012 to December 2013, increasing from 8.95% to a peak of 15.34% in June 2014. After reaching this peak, the margin declines steadily to 5.27% by March 2015. This pattern indicates an initial period of improving profitability, followed by a considerable decrease in profit efficiency in the later periods.

Asset Turnover

Asset turnover remains relatively stable throughout the periods analyzed, fluctuating marginally around 0.78 to 0.79. There is no significant upward or downward trend, suggesting consistent efficiency in utilizing assets to generate sales over time.

Return on Assets (ROA)

Return on assets increases consistently from 7.04% in March 2012 to a high of 11.87% in June 2014. After this peak, there is a notable decline to 4.15% by March 2015. This mirrors the trend seen in the net profit margin, confirming that profitability relative to assets improved initially but deteriorated markedly towards the end of the period analyzed.

Tax Burden

The tax burden ratio remained relatively stable from March 2013 through December 2014, fluctuating narrowly between 0.66 and 0.68. However, a noticeable increase occurred in the first quarter of 2015, rising significantly to 0.74 and then 0.77, indicating a higher proportion of earnings retained after taxes during this period.

Interest Burden

The interest burden exhibited a declining trend over the reported periods. Starting at 0.90 in March 2013, the ratio decreased steadily to 0.85 through December 2013, briefly recovered to around 0.89 mid-2014, and then dropped sharply in early 2015, reaching a low of 0.72 by the end of the first quarter. This decline suggests an increased impact of interest expenses on earnings before taxes over time, particularly in early 2015.

EBIT Margin

The EBIT margin showed a strong upward trend from early 2013, rising from approximately 14.78% in March 2013 to a peak of 25.94% by June 2014, signaling improved operating profitability. However, subsequent periods saw a marked decline, falling steeply to below 10% in the first quarter of 2015. This significant reduction indicates a deterioration in operating efficiency or increased operating costs near the end of the analyzed timeframe.

Asset Turnover

The asset turnover ratio remained remarkably consistent throughout the observed periods, holding steady around 0.78 to 0.79. This stability reflects a consistent ability to generate revenue from assets without significant changes in asset efficiency.

Return on Assets (ROA)

ROA mirrored the trends seen in EBIT margin, with growth from approximately 7% in early 2013 to nearly 12% during mid-2014, highlighting enhanced profitability relative to asset base. Nevertheless, the metric declined sharply in the first quarter of 2015, dropping to just above 4%, which signifies a reduced overall profitability of assets during this time.

Tax Burden

The tax burden ratio demonstrates relative stability over the observed periods, fluctuating marginally between 0.66 and 0.77. Starting at 0.67 in the first available quarter of 2013, it remains consistently close to 0.66 until late 2014, when a noticeable increase occurs, peaking at 0.77 by the first quarter of 2015.

Interest Burden

Interest burden shows a slight downward trend throughout the period under review. Beginning at 0.90, the ratio gradually declines with minor fluctuations, settling at 0.72 by the first quarter of 2015. This overall decrease suggests a reduction in interest expenses relative to earnings before interest and taxes, potentially indicating more favorable financing conditions or reduced leverage.

EBIT Margin

EBIT margin exhibits significant variation over time. Initially, the margin trends upward, moving from approximately 14.78% to a peak of 25.94% around mid-2014, suggesting improved operational efficiency or pricing power. However, from late 2014 into early 2015, a sharp decline is observed, with margins dropping to 9.49%. This reversal may indicate operational challenges, increased costs, or other adverse factors impacting profitability at the operating level.

Net Profit Margin

Net profit margin follows a pattern similar to the EBIT margin, reflecting overall profitability after expenses, taxes, and interest. The margin increases from around 8.95% to a peak of 15.34% in mid-2014, indicating strengthened bottom-line performance. Subsequently, net profit margins decline markedly to approximately 5.27% by the first quarter of 2015, signaling reduced net profitability. This decline corresponds with the decreases observed in EBIT margin and interest burden, suggesting that both operational performance and financial costs influenced net earnings.