Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Reportable Segments
- Common Stock Valuation Ratios
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Operating Profit Margin since 2005
- Analysis of Debt
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Profitability Ratios (Summary)
EMC Corp., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
- Gross Profit Margin
- The gross profit margin showed a positive trend initially, increasing from 60.82% in March 2011 to a peak of 62.81% in the first quarter of 2013. After this point, the margin remained relatively stable, fluctuating slightly around the 62% mark until the end of 2014. From early 2015 onwards, a gradual decline is observed, with the margin falling to approximately 60.7% by June 2016, indicating a modest reduction in the company's ability to generate profit from sales over the full period.
- Operating Profit Margin
- The operating profit margin followed a somewhat similar pattern to gross profit margin initially but with more pronounced fluctuations. Starting at 17.21% in March 2011, it reached a high point of 18.26% in March 2013. From the end of 2013, a consistent decreasing trend is evident, with the margin declining from around 17.87% to 12.5% by June 2016. This downward trend suggests increasing operating costs or reduced operational efficiency during the latter part of the observed timeframe.
- Net Profit Margin
- Net profit margin also experienced an initial increase, rising from 12.3% in March 2011 to a peak of about 12.76% in September 2011. Subsequently, a gradual decline is apparent, with some minor fluctuations, dropping from around 12.44% in the first quarter of 2013 to 8.54% by June 2016. This fall in net profit margin reflects a reduction in overall profitability after accounting for all expenses, possibly indicating heightened costs or other financial pressures.
- Return on Equity (ROE)
- Return on equity displayed a decreasing trend over the period under review. It started at 12.98% in March 2011 and showed modest stability with fluctuations around 12% through early 2014. Afterward, the ROE declined steadily, reaching a low of approximately 9.3% in June 2016. This decline points to a reduced ability of the company to generate returns for shareholders, which may correlate with decreasing profit margins and potential challenges in asset utilization.
- Return on Assets (ROA)
- The return on assets began at 7.18% in March 2011 and peaked at 7.65% in September 2011. A continual decline ensued thereafter, with ROA falling to about 4.49% by June 2016. This downward trajectory suggests decreasing efficiency in generating profits from the company's asset base, likely influenced by the declining profitability margins and possibly increased asset base or underutilization.
Return on Sales
Return on Investment
Gross Profit Margin
EMC Corp., gross profit margin calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Gross profit margin1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Gross Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Gross profit margin = 100
× (Gross profitQ2 2016
+ Gross profitQ1 2016
+ Gross profitQ4 2015
+ Gross profitQ3 2015)
÷ (RevenuesQ2 2016
+ RevenuesQ1 2016
+ RevenuesQ4 2015
+ RevenuesQ3 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in gross profit, revenues, and gross profit margin over the time period examined.
- Gross Profit
- Gross profit shows a generally increasing trend with fluctuations across quarters from March 2011 to June 2016. An upward movement can be observed periodically, notably around the fourth quarters of most years, which consistently display higher gross profit figures. For example, gross profit climbed to peaks of 3,523 million USD in December 2011, 4,224 million USD in December 2013, 4,505 million USD in December 2014, and 4,360 million USD in December 2015. There are some declines following peak quarters, but the longer-term trajectory remains positive.
- Revenues
- Revenues demonstrate a growth pattern with some volatility, closely mirroring the gross profit trend. Each year's fourth quarter shows a substantial increase in revenues, reaching highs of 5,574 million USD in December 2011, 6,682 million USD in December 2013, 7,049 million USD in December 2014, and 7,015 million USD in December 2015. Between these peaks, revenues fluctuate but maintain an upward general tendency. The data also reveals a seasonal cyclical pattern, with revenues tending to dip following the fourth-quarter peak.
- Gross Profit Margin
- Gross profit margin is only available starting from March 31, 2012, and remains relatively stable within a narrow range of approximately 60.68% to 62.81%. The margins peak around 62.81% in the third quarter of 2012 and early 2013, then exhibit a slight overall downward drift towards mid-2015, reaching a low of about 60.68%. Margins recover somewhat towards mid-2016, ending near 61.26%. This stability in margin percentage despite increases in revenue and gross profit indicates consistent cost control relative to revenues over the observed period.
In summary, the company displays healthy revenue and gross profit growth with pronounced seasonality characterized by strong fourth-quarter results. The gross profit margin remains stable, suggesting effective cost management. The combination of increasing absolute profits and relatively steady margins points to sustained operational efficiency during the period examined.
Operating Profit Margin
EMC Corp., operating profit margin calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Operating income | |||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Operating profit margin1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Operating profit margin = 100
× (Operating incomeQ2 2016
+ Operating incomeQ1 2016
+ Operating incomeQ4 2015
+ Operating incomeQ3 2015)
÷ (RevenuesQ2 2016
+ RevenuesQ1 2016
+ RevenuesQ4 2015
+ RevenuesQ3 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data reveals distinct trends in operating income, revenues, and operating profit margin over the observed periods spanning from March 2011 to June 2016.
- Operating Income
- Operating income experienced overall fluctuations across the quarters without a consistent upward or downward trajectory. The values peaked notably in several quarters, such as December 2011 (1,139 million USD), December 2013 (1,460 million USD), and December 2014 (1,571 million USD). Conversely, there were significant dips especially in the first quarter of 2015 (379 million USD) and the first quarter of 2016 (410 million USD). These variations suggest volatility in operational profitability across periods, with substantial swings between quarters indicative of varying business conditions or operational challenges.
- Revenues
- Revenue figures demonstrated an overall upward trend with some variability over the quarters. Starting from 4,608 million USD in March 2011, revenues generally increased to reach peaks like December 2013 at 6,682 million USD and December 2014 at 7,049 million USD. Despite these increases, the data shows recurrent periodic decreases, for instance in March 2015 (5,613 million USD) and March 2016 (5,475 million USD), reflecting possible seasonality or market fluctuations impacting revenues. The general growth pattern indicates expansion or increased sales volume over the observation period.
- Operating Profit Margin
- The operating profit margin was available for the periods starting from March 2012. It exhibited a declining trend over time. Margins were relatively strong in early observations, around 17-18% during 2012 and 2013, peaking at 18.26% in December 2012. However, this margin progressively decreased in subsequent years, reaching lows of 11.5% in March 2016. Though a slight recovery to 12.5% was noted by June 2016, the overall trend indicates a reduction in profitability efficiency relative to revenues over the period.
In summary, revenue growth was steady with periodic fluctuations, while operating income displayed significant volatility with less consistent progression. The operating profit margin's gradual decline suggests rising costs or decreased pricing power, impacting profitability despite rising revenues. The combination points to growing top-line performance that may have been offset by increasing expenses or other operational factors affecting net operating income.
Net Profit Margin
EMC Corp., net profit margin calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net income attributable to EMC Corporation | |||||||||||||||||||||||||||||
| Revenues | |||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| Net profit margin1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | |||||||||||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
Net profit margin = 100
× (Net income attributable to EMC CorporationQ2 2016
+ Net income attributable to EMC CorporationQ1 2016
+ Net income attributable to EMC CorporationQ4 2015
+ Net income attributable to EMC CorporationQ3 2015)
÷ (RevenuesQ2 2016
+ RevenuesQ1 2016
+ RevenuesQ4 2015
+ RevenuesQ3 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data over the reported quarters reveals several notable trends concerning net income, revenues, and net profit margin.
- Net Income Attributable to EMC Corporation
- The net income exhibits a pattern of fluctuations throughout the quarters. Initial figures from early 2011 show a rising trend from 477 million to 832 million US dollars by the end of that year, indicating a growing profitability. However, starting in 2012, net income demonstrates more volatility, with periodic increases such as reaching over 1 billion US dollars in the fourth quarter of 2013 and the fourth quarter of 2014, alternating with significant declines in subsequent quarters. The data toward mid-2016 indicates a lower and more inconsistent earnings pattern, with net income hovering between 268 million and 581 million US dollars, suggesting variability in profitability during this period.
- Revenues
- Revenue figures show a generally upward trend across the reported timeline. Beginning in 2011, revenues increased steadily from approximately 4608 million US dollars to over 5574 million US dollars. This upward momentum continues through the years, frequently culminating in the fourth quarters with notable peaks, including more than 7000 million US dollars recorded in the fourth quarters of 2013, 2014, and 2015. Despite minor quarterly fluctuations, overall revenue growth appears consistent, suggesting sustained sales or service demand over time.
- Net Profit Margin
- The net profit margin data, available from the fourth quarter of 2011 onward, shows a gradual decline over the observed periods. Starting at 12.3% in late 2011, the margin decreased steadily to values around 8% by mid-2016. This trend indicates that, although revenues increased, profitability relative to revenue diminished, which could be attributed to rising costs, pricing pressures, or other operational factors affecting efficiency. The decline in profit margin signals that the company retained a smaller portion of revenue as net income over time.
In summary, while revenue growth is evident throughout the quarters, net income shows higher volatility with notable peaks and troughs, and net profit margins have declined consistently. These patterns suggest that despite expanding sales, the company's profitability efficiency may have faced challenges, warranting further analysis to understand underlying causes.
Return on Equity (ROE)
EMC Corp., ROE calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net income attributable to EMC Corporation | |||||||||||||||||||||||||||||
| Total EMC Corporation’s shareholders’ equity | |||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| ROE1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| ROE, Competitors2 | |||||||||||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
ROE = 100
× (Net income attributable to EMC CorporationQ2 2016
+ Net income attributable to EMC CorporationQ1 2016
+ Net income attributable to EMC CorporationQ4 2015
+ Net income attributable to EMC CorporationQ3 2015)
÷ Total EMC Corporation’s shareholders’ equity
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the financial data over the observed periods reveals several noteworthy trends concerning net income, shareholders' equity, and return on equity (ROE).
- Net Income Attributable to EMC Corporation
- Net income demonstrates a generally fluctuating pattern throughout the periods. Initial quarters show a gradual increase from US$ 477 million to a peak of US$ 832 million by December 2011. Subsequently, net income experiences ups and downs, with some quarters reflecting significant spikes, such as December 2013 (US$ 1,022 million) and December 2014 (US$ 1,146 million). However, in some of the later periods, there is a tendency for lower figures, often dipping below US$ 500 million. This volatility suggests variable profitability performance, potentially influenced by market conditions or operational factors.
- Total Shareholders’ Equity
- Total shareholders’ equity shows a steady upward trend from US$ 17,527 million in March 2011 to a higher level of approximately US$ 22,138 million by June 2016. Although there are minor fluctuations, the overall trajectory indicates consistent growth in the company's net assets, reinforcing financial stability and an expanding equity base over the period reviewed.
- Return on Equity (ROE)
- ROE data is available from March 2012 onwards and reveals a moderately stable trend, oscillating around the 12% mark in the early periods. The ROE remains within a narrow range mostly between 11.4% and 13% until around December 2014. After this point, a slight downward trajectory is evident, with ROE declining to approximately 9.3% by June 2016. This decline may indicate diminishing efficiency in generating profits from equity or increased equity capital not proportionally matched by net income growth.
- Overall Insights
- The company's financial results suggest robust growth in shareholders' equity, implying an accumulation of retained earnings or capital inflows. Despite this, net income variations and declining ROE in the later periods could suggest challenges in sustaining profit margins or efficient utilization of equity. The spike patterns in net income highlight potential episodic gains or income volatility. The declining ROE trend warrants attention as it may reflect shifting profitability relative to equity size, which could impact investor return perceptions.
Return on Assets (ROA)
EMC Corp., ROA calculation (quarterly data)
| Jun 30, 2016 | Mar 31, 2016 | Dec 31, 2015 | Sep 30, 2015 | Jun 30, 2015 | Mar 31, 2015 | Dec 31, 2014 | Sep 30, 2014 | Jun 30, 2014 | Mar 31, 2014 | Dec 31, 2013 | Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | Sep 30, 2011 | Jun 30, 2011 | Mar 31, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||||||||||||||||||||||||
| Net income attributable to EMC Corporation | |||||||||||||||||||||||||||||
| Total assets | |||||||||||||||||||||||||||||
| Profitability Ratio | |||||||||||||||||||||||||||||
| ROA1 | |||||||||||||||||||||||||||||
| Benchmarks | |||||||||||||||||||||||||||||
| ROA, Competitors2 | |||||||||||||||||||||||||||||
| Advanced Micro Devices Inc. | |||||||||||||||||||||||||||||
| Analog Devices Inc. | |||||||||||||||||||||||||||||
| Applied Materials Inc. | |||||||||||||||||||||||||||||
| Broadcom Inc. | |||||||||||||||||||||||||||||
| Intel Corp. | |||||||||||||||||||||||||||||
| KLA Corp. | |||||||||||||||||||||||||||||
| Lam Research Corp. | |||||||||||||||||||||||||||||
| Micron Technology Inc. | |||||||||||||||||||||||||||||
| NVIDIA Corp. | |||||||||||||||||||||||||||||
| Qualcomm Inc. | |||||||||||||||||||||||||||||
| Texas Instruments Inc. | |||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).
1 Q2 2016 Calculation
ROA = 100
× (Net income attributable to EMC CorporationQ2 2016
+ Net income attributable to EMC CorporationQ1 2016
+ Net income attributable to EMC CorporationQ4 2015
+ Net income attributable to EMC CorporationQ3 2015)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several notable trends and patterns over the periods presented.
- Net Income Attributable to EMC Corporation (US$ in millions)
- The company's net income exhibits significant fluctuations throughout the observed quarters. Initially, net income rose steadily from 477 million in March 2011 to a peak of 832 million in December 2011. After this high, there was a decline during the first quarter of 2012, followed by moderate recovery and another peak of 1,022 million in December 2013. Post this peak, net income declined sharply to 392 million in March 2014, then showed cyclical variations with another high of 1,146 million in December 2014. The subsequent periods from March 2015 to June 2016 indicate lower and more variable earnings, highlighting volatility and lack of consistent growth.
- Total Assets (US$ in millions)
- Total assets demonstrated an overall upward trend over the periods. Starting at 31,187 million in March 2011, assets steadily increased to reach 38,234 million by March 2013. This trend continued with assets surpassing 45,000 million by December 2014 and ultimately reaching 46,745 million in June 2016. The growth in total assets reflects ongoing expansion or acquisition activity, although some quarters reveal minor fluctuations or plateauing, notably in mid-2014 and early 2016.
- Return on Assets (ROA) (%)
- The ROA data, available from September 2011 onward, shows a declining trend. Starting around 7.18% in September 2011, it remained relatively stable through late 2012 at slightly above 7%, before gradually decreasing in subsequent years. From 2013 to 2014, ROA values hovered between 6.3% and 5.7%, descending further to near 4.3% by the first quarter of 2016. This steady decline in ROA suggests diminishing efficiency in generating net income from the asset base.
- Overall Observations
- Despite the increase in total assets over time, net income has shown volatility and absence of a clear upward trajectory, which combined with a declining ROA points to decreasing profitability relative to asset size. The cyclicality in net income may indicate dependence on market conditions or operational factors causing variable earnings. The diminishing ROA trend is a signal for potential concerns regarding asset utilization efficiency or increasing costs relative to income generated.