General Mills Inc. (NYSE:GIS)

Gross profit margin

The gross profit margin exhibits moderate fluctuations over the observed period. Starting at 35.57% in 2014, it declines to a low of 33.74% in 2015, then recovers to levels around 35% in 2016 and 2017, followed by a slight decline to 34.48% and 34.13% in 2018 and 2019 respectively. Overall, the margin remains relatively stable with minor variability, indicating consistent control over production and direct costs.

Operating profit margin

The operating profit margin demonstrates more pronounced volatility. After a significant drop from 16.51% in 2014 to 11.78% in 2015, it recovers sharply to 16.35% in 2016 and holds steady at approximately 16.4% in 2017. Subsequently, it experiences a gradual decline to 15.94% in 2018 and 14.92% in 2019. This pattern suggests episodic pressures on operating efficiency or increases in operating expenses, partially offset in some years by improved performance.

Net profit margin

The net profit margin shows a notable dip from 10.19% in 2014 to 6.93% in 2015, similar to operating margin trends. Thereafter, it rebounds sharply to 10.25% in 2016 and increases further to 10.61% in 2017. A significant peak occurs in 2018 reaching 13.54%, indicating a highly profitable year potentially influenced by non-operating factors or tax benefits. However, it declines again to 10.39% in 2019, although remaining above initial years. These variations reflect changing bottom-line profitability conditions.

Return on equity (ROE)

Return on equity experiences considerable variation, beginning at 27.92% in 2014 and decreasing to 24.44% in 2015. It then ascends strongly to reach a peak of 38.3% in 2017, followed by a slight decline but still high level at 34.7% in 2018. In 2019, ROE drops markedly to 24.85%. The upward trend suggests improved efficiency in generating shareholder returns through most of the period, but the final decline signals possible challenges in maintaining that performance level.

Return on assets (ROA)

Return on assets shows a general downward trend, starting at 7.88% in 2014 and falling to 5.56% in 2015. It recovers moderately to 7.82% in 2016 and remains near that level at 7.6% in 2017. From 2017 onward, ROA declines gradually, reaching 6.96% in 2018 and further decreasing to 5.82% in 2019. This pattern indicates decreasing efficiency in utilizing assets to generate profits, particularly in the last two years, which may impact overall operational effectiveness.

The financial data over the six-year period indicates notable shifts in key performance metrics related to sales and profitability.

Net Sales

There is a general downward trend in net sales from 2014 through 2017, decreasing from approximately 17.9 billion USD to about 15.6 billion USD. This decline halts in 2018, with a slight increase to 15.7 billion USD, and a more marked recovery occurs in 2019, rising to approximately 16.9 billion USD. The data suggests a period of contraction followed by a gradual sales recovery towards the end of the period under review.

Gross Margin

Gross margin values decreased consistently from 6.37 billion USD in 2014 to a low of about 5.43 billion USD in 2018. However, in 2019 there is a reversal of this trend with gross margin increasing to around 5.76 billion USD. This pattern closely follows the trend seen in net sales, suggesting a correlation between sales volume and gross margin values.

Gross Profit Margin Percentage

The gross profit margin percentage shows some volatility year-over-year. It initially drops from 35.57% in 2014 to 33.74% in 2015 but then rises again to 35.62% in 2017, surpassing the initial level. Following this peak, it declines to 34.48% in 2018 and further to 34.13% in 2019. The gross profit margin percentage remains above 33%, indicating relatively stable profitability relative to sales despite fluctuations.

Overall Insights

The analyzed period exhibits a challenging environment with declining sales and gross profit in the initial years, possibly reflecting market or operational pressures. From 2018 onwards, signs of recovery are evident both in sales and gross margin values, although the profitability ratio (gross profit margin) slightly decreases. The stability of the gross profit margin percentage near the mid-30s range suggests effective management of cost of goods sold relative to sales, despite fluctuations in absolute figures. The financial trends highlight a phase of contraction followed by a measured rebound in business performance.

The financial data reveals several key trends over the six-year period from 2014 to 2019 regarding operating profit, net sales, and operating profit margin.

Operating Profit

The operating profit shows variability throughout the period. It started at 2,957,400 thousand US dollars in 2014, decreased sharply to 2,077,300 thousand US dollars in 2015, then increased again to 2,707,400 thousand US dollars in 2016. From 2016 onwards, operating profit experienced a declining trend with values dropping slightly each year and stabilizing around 2,515,900 thousand US dollars by 2019. Overall, the operating profit did not return to the 2014 peak, reflecting some instability in earnings before interest and taxes.

Net Sales

Net sales exhibited a downward trend over the first five years, decreasing from 17,909,600 thousand US dollars in 2014 to 15,619,800 thousand US dollars in 2017. Sales slightly recovered in 2018 and 2019, reaching 16,865,200 thousand US dollars in 2019. Despite this partial recovery, the net sales by the end of the period remained below the initial 2014 level, indicating challenges in revenue growth or market conditions affecting sales.

Operating Profit Margin

The operating profit margin followed a fluctuating but generally declining trajectory. It started at 16.51% in 2014, dropped significantly to 11.78% in 2015, then improved to around 16.3% in 2016 and 2017. Afterward, the margin gradually decreased again to 14.92% by 2019. This pattern suggests variations in operational efficiency or cost management impacting profitability relative to sales.

In summary, the period saw notable volatility in operating profit and profit margins, accompanied by a decline in net sales with only a modest rebound toward the end. The fluctuations in profitability and sales indicate possible operational challenges or external market pressures influencing performance. Despite some recovery in sales and profit margin in mid-period years, the overall trend points to pressures on profit generation capacity.

The analysis of the financial performance over the six-year period reveals several noteworthy trends in profitability and sales.

Net Earnings

Net earnings attributable to the company exhibited fluctuations over the period under review. Initially, earnings declined from approximately 1.82 billion US dollars in 2014 to around 1.22 billion US dollars in 2015, representing a significant decrease. Thereafter, there was a recovery with earnings increasing to about 1.70 billion in 2016, although the value slightly decreased again in 2017 to approximately 1.66 billion. The highest earnings were recorded in 2018 at roughly 2.13 billion, followed by another reduction to about 1.75 billion in 2019. Overall, net earnings demonstrated volatility without a consistent upward or downward trend.

Net Sales

Net sales displayed a generally declining trend during the initial years, falling from around 17.91 billion US dollars in 2014 to approximately 15.62 billion in 2017. However, this was followed by a modest recovery reaching approximately 16.87 billion in 2019. The sales figures suggest that the company experienced challenging market conditions in the middle period but managed to improve sales performance toward the end of the timeframe.

Net Profit Margin

The net profit margin percentage mirrored the earnings trend with some variations. It declined sharply from 10.19% in 2014 to a low of 6.93% in 2015, indicating a less efficient conversion of sales into profit. After 2015, the margin increased to 10.25% in 2016 and continued to improve to reach a peak of 13.54% in 2018, signaling enhanced profitability and operational efficiency. In 2019, the margin decreased to 10.39%, suggesting some erosion in profit relative to sales compared to the prior year.

In summary, the financial data reflects that while net sales faced a downward trend in the mid-period, the company was able to increase profitability margins significantly by 2018. Fluctuations in net earnings correspond closely with changes in both sales volume and profit margins, highlighting the interplay between revenue generation and operational efficiency in determining profitability outcomes.

The financial data reveals fluctuations in net earnings attributable to the company over the six-year period. Net earnings experienced a noticeable decrease from 1,824,400 thousand USD in 2014 to 1,221,300 thousand USD in 2015. This was followed by a recovery and increase to 1,697,400 thousand USD in 2016, maintaining a relatively stable level in 2017 at 1,657,500 thousand USD. A peak occurred in 2018 with net earnings reaching 2,131,000 thousand USD before declining again to 1,752,700 thousand USD in 2019.

Stockholders’ equity demonstrated a downward trend from 6,534,800 thousand USD in 2014 to 4,326,900 thousand USD in 2017, indicating a reduction in the company’s net assets. However, from 2017 onwards, this trend reversed, with equity rising to 6,141,100 thousand USD in 2018 and further increasing to 7,054,500 thousand USD in 2019, suggesting renewed capital accumulation or retained earnings growth during these years.

Return on equity (ROE) indicates the profitability relative to shareholders’ equity and showed variability over the observed period. The ROE declined from 27.92% in 2014 to 24.44% in 2015, followed by a significant increase to a peak of 38.3% in 2017. It slightly decreased to 34.7% in 2018 and then declined more substantially to 24.85% in 2019. These fluctuations reflect changing efficiency in generating profits from shareholders’ investments, with particularly strong performance in 2016 and 2017, and weaker returns in 2015 and 2019.

Summary of trends:

- Net earnings showed volatility, with notable dips and peaks, reflecting possible variability in operational performance or market conditions.

- Stockholders’ equity declined significantly over the first four years, followed by a strong recovery in the last two years, implying changes in capital structure, profitability retention, or asset valuation.

- ROE mirrored earnings and equity trends, with the highest efficiency in 2017 and lower returns on equity in the initial and final years of the period.

The financial data reveals notable trends in key performance indicators over the six-year period analyzed.

Net Earnings

Net earnings attributable to the company exhibit fluctuations throughout the period. After a peak of approximately $1.82 billion in 2014, earnings decreased to about $1.22 billion in 2015, representing a significant drop. This was followed by an increase to roughly $1.7 billion in 2016, maintaining at a similar level in 2017. A further increase occurred in 2018, reaching over $2.1 billion, the highest within the timeframe. However, earnings declined again in 2019 to approximately $1.75 billion.

Total Assets

Total assets experienced a general decline from 2014 through 2017, dropping from approximately $23.15 billion to $21.81 billion. A substantial increase took place in 2018, pushing total assets up to over $30.6 billion, sustaining a similar level in 2019 at around $30.1 billion. This sharp increase suggests an acquisition, investment, or other strategic asset growth during the latter part of the period.

Return on Assets (ROA)

ROA follows a downward trend overall. Starting at a high of 7.88% in 2014, it decreased sharply to 5.56% in 2015, recovered slightly to 7.82% in 2016, and remained near this level in 2017 at 7.6%. Subsequently, ROA declined steadily, falling to 6.96% in 2018 and further to 5.82% in 2019. This trend indicates a reduced efficiency in generating earnings relative to the asset base, particularly during the years when total assets expanded substantially.