Twenty-First Century Fox Inc. (NASDAQ:FOX)

Net Operating Profit After Taxes (NOPAT)

The NOPAT values exhibit considerable volatility over the analyzed period. The figure starts at 7,896 million USD in 2013, then declines sharply to 4,517 million USD in 2014. A significant recovery is observed in 2015 with a peak of 9,417 million USD, followed by another substantial drop to 4,025 million USD in 2016. The subsequent years show modest increases to 4,273 million USD in 2017 and 4,669 million USD in 2018, yet these figures remain well below the 2015 peak, indicating fluctuations in operational profitability.

Cost of Capital

The cost of capital shows a gradual declining trend from 14.19% in 2013 to 12.69% in 2016, suggesting a decrease in the overall required rate of return during this period. However, from 2017 onwards, there is a reversal with the cost of capital rising again to 12.86% in 2017 and further to 14.35% in 2018, indicating increasing capital costs or market risk perceptions toward the end of the period.

Invested Capital

Invested capital fluctuates moderately but remains within a relatively narrow band. Starting at 44,434 million USD in 2013, it increases to 48,265 million USD in 2014, then declines to 44,315 million USD in 2015 and further down to 42,462 million USD in 2016. Afterward, it grows steadily to 45,055 million USD in 2017 and up to 47,272 million USD by 2018. This indicates a slight overall increase in capital investment over the period, despite some mid-period reductions.

Economic Profit

The economic profit displays significant fluctuations, with negative values dominating the later years. It starts positively at 1,590 million USD in 2013 but turns negative to -2,212 million USD in 2014. A strong rebound occurs in 2015 with economic profit reaching 3,405 million USD. However, in the subsequent years, economic profit consistently remains negative at -1,366 million USD in 2016, -1,521 million USD in 2017, and -2,117 million USD in 2018. This suggests that in most years, the returns generated did not exceed the cost of capital, reflecting potential value destruction or capital inefficiencies in those periods.

Net Income Attributable to Stockholders

The net income showed notable fluctuations over the analyzed periods. It started at 7,097 million USD in 2013, then declined significantly to 4,514 million USD in 2014. In 2015, there was a strong rebound with net income increasing to 8,306 million USD, marking the highest value in the timeframe. Afterward, net income dropped sharply to 2,755 million USD in 2016 and remained relatively low in 2017, with a slight increase to 2,952 million USD. In 2018, net income rose again to 4,464 million USD, indicating partial recovery but still below the earlier peak.

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes demonstrated a pattern similar to net income but with somewhat less pronounced variation. Starting at 7,896 million USD in 2013, it decreased substantially to 4,517 million USD in 2014. NOPAT peaked at 9,417 million USD in 2015, exceeding the initial period's value. Following this peak, it declined sharply to 4,025 million USD in 2016. The next two years showed moderate growth, with NOPAT increasing to 4,273 million USD in 2017 and 4,669 million USD in 2018.

Overall Trend Analysis

Both net income and NOPAT experienced significant volatility throughout the six years. The years 2014 and 2016 are characterized by marked downturns in profitability metrics. The year 2015 stands out as a peak period for both measures, reflecting a temporary strong financial performance. After 2016, there is evidence of gradual operational improvement through 2018, though neither net income nor NOPAT returned to their earlier peak levels by the end of the period. The data suggests a cycle of recovery following considerable profit contractions, warranting further examination of underlying causes during downturn years.

Provision for income taxes from continuing operations

The provision for income taxes generally declined from 2013 to 2016, starting at 1,690 million US dollars in 2013 and decreasing steadily to 1,130 million in 2016. In 2017, there was a notable increase to 1,419 million, followed by a significant drop to a negative figure of -364 million in 2018, which may indicate a tax benefit or a reversal of previous tax provisions.

Cash operating taxes

Cash operating taxes fluctuated over the period. Beginning at 1,612 million US dollars in 2013, the figure increased to 1,707 million in 2014, then decreased to 1,504 million in 2015. A more marked decline occurred in 2016 with taxes dropping to 1,095 million. Subsequently, there was a sharp rise to 1,781 million in 2017 before falling significantly to 904 million in 2018. The fluctuations suggest variability in cash tax payments potentially linked to changing profitability or tax planning strategies.

Total reported debt & leases

The total reported debt and leases displayed fluctuations over the six-year period. Starting at $19,912 million in 2013, the debt increased to a peak of $22,748 million in 2014. Following this peak, there was a general decline in debt, descending to $20,609 million in 2015 and remaining relatively stable through 2016 and 2017, with slight increases and decreases respectively. By 2018, the debt had further decreased to $21,076 million. Overall, the debt levels demonstrate initial growth followed by a slight reduction and stabilization trend.

Total Twenty-First Century Fox, Inc. stockholders’ equity

Stockholders' equity showed an overall increasing trend despite some variability. Beginning at $16,998 million in 2013, there was a moderate increase to $17,418 million in 2014, followed by a small decrease to $17,220 million in 2015. A notable decline occurred in 2016, when equity dropped sharply to $13,661 million. After this decline, equity rebounded, increasing to $15,722 million in 2017 and further to $19,564 million in 2018, marking the highest equity value in the period.

Invested capital

Invested capital demonstrated a fluctuating but generally downward trend in the earlier years, followed by recovery in later years. It began at $44,434 million in 2013, increased to $48,265 million in 2014, then decreased significantly to $44,315 million in 2015 and further declined to $42,462 million in 2016. From 2016 onwards, invested capital increased, reaching $45,055 million in 2017 and $47,272 million in 2018, though it did not quite return to the previous peak observed in 2014.

The financial analysis reveals fluctuations in the company's economic profitability and efficiency over the examined periods. The economic profit exhibited considerable volatility, with positive values in some years and significant negative values in others, indicating inconsistent value creation relative to the capital invested.

Economic Profit

Economic profit reached a peak of 3,405 million US dollars in the year ending June 30, 2015, demonstrating a period of strong profitability. However, in other years such as 2014, 2016, 2017, and 2018, the economic profit was negative, with the largest loss being 2,212 million US dollars in 2014. This pattern indicates challenges in consistently maintaining value above the cost of capital.

Invested Capital

The invested capital slightly increased overall from 44,434 million US dollars in 2013 to 47,272 million in 2018. This suggests ongoing investments or capital employed in the business were maintained at a relatively stable but moderately growing level. Notably, invested capital dipped in 2015 and 2016 before rising again, reflecting possible strategic shifts or asset adjustments.

Economic Spread Ratio

The economic spread ratio, which reflects the return on invested capital minus the cost of capital, also displayed volatility, mirroring the trends seen in economic profit. It was positive only in 2013 and 2015 (3.58% and 7.68%, respectively), indicating periods where returns exceeded costs. In the other years, negative spreads were observed, with the lowest being -4.58% in 2014, signaling that the company’s returns did not cover the cost of capital during those times.

Overall, the data suggest that the company's ability to generate returns above its cost of capital has been inconsistent. Despite relatively stable invested capital levels, the negative economic profits and economic spread ratios in four out of six years point toward operational or market challenges limiting value creation. The year 2015 stands out as an exception with notably strong performance, which may highlight a successful strategic or market position during that period. The recurring negative spreads and economic profits in subsequent years warrant attention to improve profitability and capital efficiency.

Adjusted Revenues

Adjusted revenues exhibited fluctuations over the observed period. Starting at approximately 27.5 billion USD in mid-2013, revenues peaked near 31.9 billion USD in mid-2014, followed by a decline to around 27.4 billion USD in mid-2016. Subsequently, revenues recovered slightly to reach nearly 30.5 billion USD by mid-2018. This indicates a general trend of volatility with some recovery toward the end of the period.

Economic Profit

The economic profit experienced significant volatility and predominantly negative values. It began positively at 1.59 billion USD in mid-2013, dropped sharply to a negative figure of -2.21 billion USD in mid-2014, and recovered strongly to 3.41 billion USD in mid-2015. Thereafter, economic profit values remained negative through to mid-2018, with losses intensifying from -1.37 billion USD in mid-2016 to -2.12 billion USD by mid-2018. This pattern reflects challenges in sustaining profitable economic returns over multiple periods, despite occasional rebounds.

Economic Profit Margin

The economic profit margin mirrored the economic profit trend, with considerable swings between positive and negative margins. It started at 5.79% in mid-2013, dropped substantially to -6.94% in mid-2014, improved markedly to 11.84% in mid-2015, then consistently declined and remained negative from mid-2016 onward, ending again at -6.94% in mid-2018. This reveals a struggle to maintain operational efficiency and profitability relative to revenues, with only intermittent periods of positive margin performance.

Overall Insights

The data reveals a pattern of unstable financial performance characterized by revenue volatility and inconsistent profitability. While revenues showed some recovery and growth towards the later years, both economic profit and profit margins predominantly remained negative after mid-2015, indicating difficulties in translating revenue into sustained economic value. The negative margins and economic profits suggest potential operational inefficiencies or increased costs that may be eroding shareholder value during most of the observed timeframe.