Monsanto Co. (NYSE:MON)

The analyzed financial data presents several notable trends over the six-year period regarding net operating profit after taxes (NOPAT), cost of capital, invested capital, and economic profit.

Net Operating Profit After Taxes (NOPAT)

NOPAT experienced fluctuations throughout the period. It increased from 2,247 million USD in 2012 to a peak of 2,743 million USD in 2013. Subsequently, it declined over the next two years, reaching a low of 1,816 million USD in 2016, before rebounding to 2,582 million USD in 2017. This suggests some volatility in operational profitability, with a notable dip during 2015-2016 followed by recovery.

Cost of Capital

The cost of capital exhibited a general downward trend from 15.67% in 2012 to a low of 13.86% in 2015. After this period, it showed a slight increase, reaching 14.42% by 2017. This pattern indicates a modest reduction in the required return on invested capital up to 2015, potentially reflecting changing financial market conditions or company risk profile, followed by a stabilization or slight increase thereafter.

Invested Capital

Invested capital increased overall during the period, starting from 14,553 million USD in 2012 and reaching a peak of 18,327 million USD in 2015. There was a decline in 2016 to 15,963 million USD, followed by a slight increase to 16,366 million USD in 2017. The rise in invested capital through 2015 indicates substantial investment activities or asset growth, while the subsequent decrease suggests divestments or asset reductions.

Economic Profit

Economic profit showed considerable variability over the years. Initially negative at -34 million USD in 2012, it turned positive in 2013 and 2014 with values of 252 million USD and 276 million USD, respectively. However, the company recorded significant economic losses in 2015 and 2016, with negative economic profits of -179 million USD and -402 million USD correspondingly. In 2017, the economic profit recovered to 221 million USD. These fluctuations highlight periods where the company was either creating or destroying value relative to its cost of capital.

Overall, the data reveals a cyclical financial performance, with profitability and economic profit peaking early in the period, weakening in the middle years, and showing signs of recovery by the end of the timeframe. The invested capital trajectory suggests strategic investment shifts, while the cost of capital trends indicate varying financial or market conditions impacting the company's capital costs.

The financial data reveals certain trends in profitability for the analyzed company over a six-year period ending August 31, 2017.

Net Income Attributable to the Company

Net income shows an overall fluctuating pattern across the years. It increased steadily from 2045 million US dollars in 2012 to a peak of 2740 million in 2014. Subsequently, it experienced a decline to 2314 million in 2015 and a more pronounced decrease to 1336 million in 2016, indicating a significant setback in profitability during that year. However, the net income rebounded sharply to 2260 million in 2017, signaling recovery but not reaching the earlier peak levels.

Net Operating Profit After Taxes (NOPAT)

NOPAT similarly experienced variations over the examined period. It rose from 2247 million USD in 2012 to 2743 million in 2013, before slightly declining to 2633 million in 2014. The value then decreased further to 2361 million in 2015 and took a more substantial fall to 1816 million in 2016. In 2017, NOPAT saw a notable recovery to 2582 million. This suggests operational efficiency or profitability challenges during 2015 and 2016 with improvement thereafter.

Overall, both net income and NOPAT indicate a peak generally around 2013-2014, followed by declines in 2015 and notably in 2016. The recovery in 2017 reflects a positive turnaround. The inconsistency observed in both metrics suggests volatility in profitability and operational performance during these years, highlighting a period of financial challenges mid-cycle with subsequent recovery efforts yielding results by the final year reported.

Income Tax Provision from Continuing Operations

The income tax provision from continuing operations exhibited a fluctuating trend over the six-year period. Starting at 901 million USD in 2012, a slight increase to 915 million USD was observed in 2013. This upward movement continued more notably in 2014, reaching a peak of 1,078 million USD. However, the subsequent years showed a declining pattern: it decreased to 864 million USD in 2015, further dropped to 695 million USD in 2016, and reached its lowest point at 626 million USD in 2017. Overall, despite an initial rise until 2014, the income tax provision has generally declined in the latter part of the timeframe.

Cash Operating Taxes

Cash operating taxes demonstrated more volatility relative to the income tax provision. Beginning at 708 million USD in 2012, there was a steady increase to 821 million USD in 2013, followed by a substantial spike to 1,179 million USD in 2014. The upward trend continued into 2015, peaking at 1,272 million USD. However, unlike income tax provision, cash operating taxes experienced a sharp decrease in 2016, falling to 801 million USD, and then a further decline to 719 million USD by 2017. Despite the fluctuations, the values at the end of the period remained higher than the initial 2012 figures.

Comparative Observations

Both income tax provision and cash operating taxes display a pattern of increasing values through the early years, reaching peaks around 2014 or 2015, followed by a notable decline in the last two years. The cash operating taxes showed more pronounced increases and decreases compared to the income tax provision, suggesting greater variability in actual tax cash outflows relative to the accounting provisions. The consistent decline in both items after 2015 might indicate changes in tax strategy, operational performance, or tax regulations affecting the company's tax liabilities.

The financial data reveals several important trends and shifts over the six-year period ending August 31, 2017.

Total reported debt & leases

This metric shows a notable increase from 2012 through 2015, rising sharply from approximately $2.4 billion to $9.5 billion. The peak occurs in 2015 with a slight decline thereafter, dropping to $8.6 billion by 2017. This suggests a significant increase in leverage or borrowing activities during the mid-period, followed by some reduction in debt levels.

Total Monsanto Company shareowners’ equity

Shareowners’ equity exhibits a declining trend over the years. Starting at about $11.8 billion in 2012, equity increases slightly in 2013 but then declines steadily to a low of $4.5 billion in 2016. A partial recovery to $6.4 billion in 2017 is observed. This decreasing equity position alongside rising debt levels in the earlier years indicates possible financial restructuring or share buybacks impacting the equity base.

Invested capital

Invested capital shows a general upward trend from 2012 through 2015, rising from approximately $14.6 billion to $18.3 billion before declining to around $16.0 billion in 2016. A slight increase to $16.4 billion in 2017 occurs. The growth in invested capital up to 2015 parallels the increases in both debt and equity during that period, suggesting expansion or acquisition initiatives. The subsequent decrease and stabilization may reflect a period of consolidation or reevaluation of capital investment.

Overall, the data suggest that the company experienced increased leverage with a peak in debt around 2015, accompanied by declining shareholders’ equity after 2013. Despite fluctuations, invested capital remained relatively high, implying continued commitment to the company's operational base or growth efforts. The partial recovery in equity and reduction in debt post-2015 could indicate a strategic shift towards strengthening the balance sheet and deleveraging.

Economic Profit

The economic profit shows considerable variability throughout the observed periods, with values fluctuating from a significant loss of 34 million US dollars in 2012 to a high of 276 million US dollars in 2014. After peaking in 2014, economic profit declined to -179 million in 2015 and further to -402 million in 2016, indicating deteriorating profitability. However, in 2017, there is a strong recovery as economic profit rises back to 221 million US dollars.

Invested Capital

The invested capital displays an overall upward trend from 14,553 million US dollars in 2012 to 18,327 million in 2015, reflecting an expansion in asset base or investment activities. After reaching this peak in 2015, the invested capital reduces notably to 15,963 million in 2016, before rising again slightly to 16,366 million in 2017. This pattern suggests a significant divestment or asset reallocation in 2016 followed by moderate reinvestment in 2017.

Economic Spread Ratio

The economic spread ratio, which indicates the returns generated over the cost of capital, exhibits fluctuations in alignment with the economic profit trends. It starts negative at -0.23% in 2012, turns positive rising to 1.7% in 2014, then drops sharply to -0.98% in 2015 and to its lowest point of -2.52% in 2016. By 2017, the ratio rebounds to a positive 1.35%, indicating an improvement in value creation after two years of negative spreads. These fluctuations corroborate the cyclical nature of the economic profit during the period.

The financial data reveals varying performance trends over the six-year period. Economic profit figures exhibit a volatile pattern, initially showing significant negative values, followed by improvement, a subsequent decline, and finally a recovery by the end of the period.

Economic Profit

Economic profit began at a substantial loss of 34 million US dollars in 2012, which drastically increased to a positive 252 million in 2013 and further to 276 million in 2014. However, there was a reversal with economic profit falling sharply into negative territory in 2015 (-179 million) and 2016 (-402 million). By 2017, economic profit recovered to a positive 221 million US dollars.

Adjusted Net Sales

Adjusted net sales displayed moderate fluctuations during the period. Sales grew steadily from 13,435 million US dollars in 2012 to a peak of 15,685 million in 2014. Subsequently, net sales declined to 13,688 million by 2016 before increasing slightly to 14,878 million in 2017.

Economic Profit Margin

The economic profit margin mirrored the trend in economic profit with fluctuations reflecting the volatility in profitability. It rose from a negative margin of -0.25% in 2012 to positive margins of 1.69% and 1.76% in 2013 and 2014 respectively. This was followed by a downturn to negative margins in 2015 (-1.2%) and further in 2016 (-2.94%), before rebounding to a positive margin of 1.49% in 2017.

Overall, the data indicates a period of initial recovery in economic profitability and sales, followed by a significant downturn around 2015 and 2016. The improvement seen in 2017 suggests a positive shift towards restoring profitability. The fluctuations in economic profit margin confirm the unstable profitability conditions during these years. Adjusted net sales saw a peak mid-period but did not sustain growth, contributing to the variability in economic profit outcomes.