eBay Inc. (NASDAQ:EBAY)

Return on Assets (ROA)

The ROA exhibited significant fluctuations across the five-year period. Starting from a very low value of 0.1% in 2014, it experienced a substantial increase to 9.7% in 2015 and peaked at 30.47% in 2016. However, this positive trend reversed sharply in 2017, with ROA falling to -3.91%. The metric then recovered to 11.09% in 2018, indicating a partial rebound in the company's ability to generate profit from its assets.

Financial Leverage

Financial leverage showed a generally increasing trend. Beginning at 2.27 in 2014, it rose to 2.7 in 2015, dipped slightly to 2.26 in 2016, and then increased significantly to 3.22 in 2017, continuing upwards to 3.63 in 2018. This pattern suggests the company progressively relied more on debt financing relative to equity over the period, with only a minor decrease in leverage in 2016.

Return on Equity (ROE)

ROE followed a pattern broadly similar to ROA but with more pronounced volatility. The ratio increased markedly from 0.23% in 2014 to a high of 68.94% in 2016, reflecting substantial shareholder profitability improvement during those years. However, there was a sharp decline to -12.6% in 2017, indicating a significant loss for equity holders at that time. The ratio then rebounded strongly to 40.28% in 2018, demonstrating recovery in equity returns.

Net Profit Margin

The net profit margin exhibited significant fluctuations over the five-year period. Starting at a very low 0.26% in 2014, it sharply increased to 20.08% in 2015 and further surged to a peak of 80.92% in 2016. However, the margin then experienced a pronounced decline, turning negative to -10.62% in 2017, before recovering to 23.54% in 2018. This pattern indicates volatile profitability, with a notable dip in 2017 followed by partial recovery.

Asset Turnover

Asset turnover showed moderate variability across the years. It increased from 0.4 in 2014 to 0.48 in 2015, suggesting improved efficiency in using assets to generate revenue. This was followed by a decline to 0.38 in 2016 and a further slight decrease to 0.37 in 2017. In 2018, asset turnover rebounded to 0.47, close to the 2015 level. Overall, the values suggest fluctuating asset utilization efficiency with recovery signs at the end of the period.

Financial Leverage

Financial leverage rose steadily throughout the period. It was 2.27 in 2014 and increased to 2.7 in 2015. After a slight drop to 2.26 in 2016, leverage climbed substantially in the subsequent years to 3.22 in 2017 and 3.63 in 2018. This trend implies an increasing reliance on debt or other liabilities to finance assets, potentially increasing financial risk but also leveraging potential returns.

Return on Equity (ROE)

Return on equity followed a trend closely related to net profit margin but with notable magnitude variations. It was particularly low at 0.23% in 2014, rose sharply to 26.23% in 2015, and peaked at 68.94% in 2016. The significant decline to -12.6% in 2017 marked a year of negative equity returns, coinciding with the drop in profit margin. A substantial recovery to 40.28% in 2018 indicates resumed strong profitability relative to shareholders' equity.

The financial data reveals significant fluctuations in several key performance indicators over the five-year period. There are notable variances in profitability, leverage, and efficiency metrics, reflecting dynamic changes in the company's operational and financial environment.

Tax Burden

The tax burden ratio exhibits pronounced volatility, starting exceptionally low at 0.01 in 2014 and peaking at 2 in 2016, indicating a tax expense surpassing pre-tax income during that year. It then sharply declines to -0.45 in 2017, suggesting a tax benefit or negative tax expense, before normalizing to 0.93 in 2018. Such fluctuations imply inconsistent tax impacts on earnings, possibly due to changes in tax regulations, one-time events, or adjustments in deferred tax assets/liabilities.

Interest Burden

The interest burden ratio maintains a relatively stable trend, declining slightly from 0.97 in 2014 to 0.89 in both 2017 and 2018. This consistency suggests stable interest expenses relative to operating income, indicating steady debt servicing costs without significant new borrowing or interest rate fluctuations impacting operating profitability.

EBIT Margin

The EBIT margin shows strong performance with variability, increasing from 20.41% in 2014 to a peak of 42.96% in 2016. Subsequently, it decreases to 26.8% in 2017 before a modest increase to 28.35% in 2018. The peak in 2016 implies exceptional operational efficiency or cost management during that year, while the decline after may indicate rising costs or pricing pressures affecting core profitability.

Asset Turnover

Asset turnover demonstrates moderate fluctuations, rising from 0.4 in 2014 to 0.48 in 2015, then declining to a low of 0.37 in 2017 before recovering to 0.47 in 2018. This pattern suggests varying effectiveness in utilizing assets to generate revenue, with the dip in 2017 possibly indicating underutilization or increased asset base not yet matched by revenue growth.

Financial Leverage

Financial leverage increases steadily over the period, starting at 2.27 in 2014 and rising to 3.63 by 2018. This upward trend indicates a growing reliance on debt financing or higher liabilities relative to equity, potentially enhancing returns but also increasing financial risk and obligations.

Return on Equity (ROE)

ROE shows substantial volatility, improving dramatically from 0.23% in 2014 to a high of 68.94% in 2016. However, it turns negative at -12.6% in 2017 before rebounding to 40.28% in 2018. This fluctuation aligns with changes in tax burden, EBIT margin, and leverage, underscoring the sensitivity of equity returns to operating performance and capital structure variations during these years.

The financial ratios over the 2014 to 2018 period display significant variability, indicating fluctuations in operational efficiency, profitability, and asset utilization.

Net Profit Margin

The net profit margin showed considerable volatility. It started very low at 0.26% in 2014, sharply increased to a notable peak of 80.92% in 2016, then declined dramatically to a negative margin of -10.62% in 2017 before recovering to 23.54% in 2018. This pattern suggests periods of highly varying profitability performance, including a substantial loss year in 2017.

Asset Turnover

The asset turnover ratio remained relatively stable but exhibited some fluctuations. Beginning at 0.40 in 2014, it increased to 0.48 in 2015, then decreased to 0.38 and 0.37 in 2016 and 2017 respectively, before rising again to 0.47 in 2018. This indicates changes in how efficiently the company utilized its assets to generate revenue, with a general trend toward recovery in asset utilization by 2018.

Return on Assets (ROA)

Return on assets followed a pattern similar to net profit margin, beginning at a minimal 0.1% in 2014 and increasing substantially to 30.47% in 2016. In 2017, ROA turned negative at -3.91%, then rebounded to 11.09% in 2018. This suggests fluctuations in overall profitability relative to the asset base, reflecting the same operational challenges and recoveries indicated by the net profit margin.

In summary, the analyzed period is characterized by pronounced fluctuations in profitability measures, including net profit margin and ROA, with 2017 emerging as a particularly challenging year. The asset turnover ratio, while more stable, also shows variability that aligns with the periods of profit performance, suggesting operational and market factors influencing both asset efficiency and profitability.

Tax Burden

The tax burden ratio exhibited significant volatility over the analyzed years. It started at a very low level of 0.01 in 2014, surged dramatically to 0.79 in 2015, and peaked at 2.00 in 2016, indicating unusual tax-related impacts. However, it then dropped sharply into negative territory at -0.45 in 2017 before rebounding to a positive ratio of 0.93 in 2018. These fluctuations suggest irregular tax effects or adjustments affecting profitability during this period.

Interest Burden

The interest burden ratio declined slightly from 0.97 in 2014 to a stable 0.89 in both 2017 and 2018. This gradual decrease indicates a mild reduction in the impact of interest expenses on earnings before tax, reflecting either improved cost management or lower interest obligations over time.

EBIT Margin

The EBIT margin showed considerable fluctuation. It increased markedly from 20.41% in 2014 to a peak of 42.96% in 2016, indicating improved operating profitability. However, this was followed by a sharp decline to 26.8% in 2017, with a slight recovery to 28.35% in 2018. This pattern may signify changes in operating efficiency, cost structure, or market conditions affecting earnings before interest and taxes.

Asset Turnover

The asset turnover ratio experienced moderate variation. It increased from 0.40 in 2014 to 0.48 in 2015, then declined to around 0.37 in 2017 before rebounding to 0.47 in 2018. This indicates fluctuating efficiency in asset utilization to generate revenue, with a notable dip in 2016-2017 followed by recovery.

Return on Assets (ROA)

ROA demonstrated significant variability, initially nearly null at 0.1% in 2014, rising sharply to 9.7% in 2015 and further to 30.47% in 2016. This strong improvement was disrupted in 2017 by a negative return of -3.91%, signaling a loss relative to asset base. A recovery to 11.09% in 2018 followed. The observed pattern highlights a period of exceptional performance followed by a setback and partial rebound, influenced by changes in operating profitability, tax, and interest burdens as well as asset efficiency.

Tax Burden

The tax burden ratio exhibited significant fluctuations over the analyzed period. It began at a low value of 0.01 in 2014, indicating minimal tax impact relative to earnings, increased substantially to 0.79 in 2015, and peaked at 2 in 2016. Notably, in 2017 the ratio turned negative, reaching -0.45, before recovering to 0.93 in 2018. This volatility suggests considerable variability in tax expenses or benefits relative to earnings during these years.

Interest Burden

The interest burden ratio remained relatively stable and close to 1 throughout the period, decreasing slightly from 0.97 in 2014 to 0.89 in both 2017 and 2018. This trend indicates a consistent management of interest expenses with a minor improvement in reducing interest costs relative to operating income.

EBIT Margin

The EBIT margin showed an overall upward trend with notable volatility. It increased from 20.41% in 2014 to a peak of 42.96% in 2016, indicating a significant improvement in operating profitability during this time. However, this margin declined sharply to 26.8% in 2017 before slightly increasing to 28.35% in 2018. The decline after 2016 suggests challenges in maintaining the high operating profit levels achieved.

Net Profit Margin

The net profit margin demonstrated substantial variability and extreme values over the years. Starting at a very low 0.26% in 2014, it rose drastically to 20.08% in 2015 and then surged to an exceptionally high 80.92% in 2016. However, it then plunged into negative territory at -10.62% in 2017, indicating a net loss, before recovering to 23.54% in 2018. This pattern reflects significant fluctuations in profitability, potentially due to extraordinary items, tax impacts, or other financial events influencing net income.