Monsanto Co. (NYSE:MON)

The financial data reveals several significant trends over the six-year period under review. The net operating profit after taxes (NOPAT) demonstrates variability with a peak in 2013, followed by a general decline until 2016, and a recovery in 2017. Specifically, NOPAT increased from 2247 million US dollars in 2012 to 2743 million US dollars in 2013, then decreased to 1816 million US dollars by 2016, before ascending again to 2582 million US dollars in 2017.

The cost of capital shows a relatively stable pattern, fluctuating mildly between 14.06% and 16.03% throughout the period. The highest cost of capital was in 2013 at 16.03%, and it generally remained close to 14-15% in other years, indicating a consistent cost structure with minor variations.

Invested capital rose steadily from 14553 million US dollars in 2012 to 18327 million US dollars in 2015, followed by a decrease in 2016 and a slight increase again in 2017. This indicates an expansion of the capital base during the initial years with some contraction and stabilization in the later years.

Economic profit, which reflects the value created above the cost of capital, exhibits volatility and some negative values. After a negative economic profit of -67 million US dollars in 2012, there was a positive upward shift to 215 million US dollars in 2013 and 242 million US dollars in 2014. The figure then dropped to negative values in 2015 and 2016 (-216 million and -434 million US dollars respectively), before rebounding to a positive 187 million US dollars in 2017. This volatility indicates fluctuating efficiency in generating returns above the cost of capital.

Summary of Key Trends:

1. NOPAT peaked in 2013, declined through 2016, and rebounded in 2017.

2. The cost of capital remained relatively stable, with small fluctuations around 15%.

3. Invested capital increased steadily until 2015, declined in 2016, then slightly increased in 2017.

4. Economic profit was positive in early years, turned negative in 2015 and 2016, and returned to positive territory in 2017, indicating periods of underperformance relative to the cost of capital.

Overall, the data suggests a period of growth and profitability till 2013-2014, followed by operational and financial challenges in 2015 and 2016, culminating in signs of recovery in 2017. The variation in economic profit highlights the importance of improving efficiency in capital utilization to sustain value creation. Monitoring the relationship between invested capital and returns will be critical for future financial performance.

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.

Adjusted Net Sales

The adjusted net sales exhibit fluctuations over the analyzed periods. The sales increased from 13,435 million US dollars in 2012 to a peak of 15,685 million in 2014. Subsequently, a decline occurred in 2015 and 2016, with values falling to 14,933 million and 13,688 million respectively, followed by a rebound to 14,878 million in 2017. This pattern suggests some instability in revenue generation during the period, with a notable dip between 2014 and 2016 before recovery.

Economic Profit

The economic profit displays significant volatility throughout the six years. A negative value of -67 million was recorded in 2012, which shifted sharply to positive territory with 215 million in 2013 and 242 million in 2014. However, in 2015 and 2016, economic profit turned negative again, reaching lows of -216 million and -434 million respectively. In 2017, the figure returned to a positive 187 million. This indicates periods of both value creation and destruction, with economic profit not consistently aligning with sales trends.

Economic Profit Margin

The economic profit margin follows a trajectory similar to the economic profit itself. From a negative margin of -0.5% in 2012, it rose to positive margins of 1.45% and 1.54% in 2013 and 2014. It then sharply declined to -1.44% and -3.17% in 2015 and 2016 before recovering to 1.26% in 2017. This margin volatility highlights inconsistencies in the company’s ability to generate returns above its cost of capital across the periods, with negative profitability periods reflecting diminished economic value.

Overall Analysis

The financial data reveals a cyclical pattern of performance with periods of growth in sales and profitability followed by downturns. The declines in both economic profit and economic profit margin during 2015 and 2016, accompanied by reduced sales, suggest challenges in operating efficiency or market conditions during that timeframe. The recovery in 2017 indicates some improvement in economic profitability and sales stability. The interplay of these indicators signals the need for close monitoring of operational execution and market factors influencing profitability persistence.