Monsanto Co. (NYSE:MON)

Net Operating Profit After Taxes (NOPAT)

The NOPAT shows a fluctuating trend over the six-year period. It increased from 2247 million US$ in 2012 to a peak of 2743 million US$ in 2013, followed by a decline to 2361 million US$ in 2015. A more pronounced decrease occurred in 2016, reaching 1816 million US$. However, the figure recovered noticeably in 2017, rising back to 2582 million US$.

Cost of Capital

The cost of capital remained relatively stable, fluctuating modestly between 14.04% and 16.01%. It started at 15.88% in 2012, peaked slightly at 16.01% in 2013, then generally decreased to around 14.04%-14.08% during 2015 and 2016, before a small increase to 14.62% in 2017.

Invested Capital

Invested capital exhibited an increasing trend from 14553 million US$ in 2012 up to 18327 million US$ in 2015, indicating a growth phase during the first four years. However, this was followed by a decline to 15963 million US$ in 2016. In 2017, invested capital showed a slight recovery to 16366 million US$ but did not reach the previous peak.

Economic Profit

Economic profit demonstrated significant variability throughout the period. Starting with a slight negative value of -64 million US$ in 2012, it improved to positive values in 2013 (218 million US$) and 2014 (245 million US$). In contrast, sharp declines occurred in 2015 and 2016, with economic profit turning negative at -213 million US$ and further to -431 million US$. By 2017, economic profit recovered to a positive figure of 190 million US$.

Overall Insights

The data indicate a cyclical pattern in profitability and value creation, with strong performance in the early years followed by a downturn and partial recovery by 2017. The decline in economic profit in 2015 and 2016 coincides with reduced NOPAT and invested capital adjustments, suggesting operational and investment challenges during that period. Despite fluctuations, the cost of capital remained relatively steady, implying consistent financing conditions. The recovery in NOPAT and economic profit in 2017 signals a potential stabilization or improvement in operational efficiency and capital utilization.

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 exhibits significant volatility over the examined periods. In 2012, the figure was negative at -64 million US dollars, followed by a substantial increase to 218 million USD in 2013 and further improvement to 245 million USD in 2014. However, 2015 and 2016 saw sharp declines to -213 million and -431 million USD respectively, before a recovery to 190 million USD in 2017. This pattern suggests fluctuating profitability, with notable downturns in the mid-periods and partial recovery by the end of the period.

Invested Capital

The invested capital shows a general upward trend from 14,553 million USD in 2012 to a peak of 18,327 million USD in 2015. After reaching this peak, the invested capital dropped to 15,963 million USD in 2016 and then slightly increased again to 16,366 million USD in 2017. This trajectory indicates an expansion phase leading up to 2015, followed by a contraction or divestment phase, and stabilization in the final year.

Economic Spread Ratio

The economic spread ratio mirrors the fluctuations seen in economic profit. Initially negative at -0.44% in 2012, it improved significantly to positive values of 1.39% in 2013 and 1.5% in 2014. The ratio then declined sharply to negative territory at -1.16% in 2015 and further deteriorated to -2.7% in 2016. In 2017, the ratio rebounded to a positive 1.16%. These shifts indicate varying returns relative to the invested capital, with periods of positive economic value creation interrupted by phases of economic value destruction.

Summary

Overall, the data reveals cyclical trends in financial performance characterized by alternating periods of growth and decline. The economic profit and spread ratio both highlight phases of strong economic value creation followed by substantial downturns, particularly in 2015 and 2016. The invested capital increased consistently until 2015, suggesting strategic investments or acquisitions, before a notable decrease and subsequent stabilization occurred. The recovery in 2017 across all metrics points toward a renewed positive performance trajectory at the end of the period.

Adjusted Net Sales

The adjusted net sales demonstrated a fluctuating trend over the evaluated period. Starting at $13,435 million in 2012, sales increased steadily, reaching a peak of $15,685 million in 2014. However, in the subsequent years, sales declined to $13,688 million in 2016 before slightly recovering to $14,878 million in 2017. This indicates variability in the sales performance with a notable dip in the middle years.

Economic Profit

The economic profit displayed significant volatility across the years. The company recorded a loss of $64 million in 2012, followed by a remarkable shift to positive economic profit of $218 million in 2013 and an increase to $245 million in 2014. Subsequently, the company experienced substantial negative economic profits, with losses of $213 million in 2015 and a further decline to $431 million in 2016. A recovery occurred in 2017, yielding a positive economic profit of $190 million. This pattern reflects considerable fluctuations in profitability, with marked periods of loss between years of gains.

Economic Profit Margin

The economic profit margin corresponded closely with the changes in economic profit, evidencing a variable profit efficiency. The margin started negative at -0.48% in 2012, then improved to positive territory with 1.47% in 2013 and slightly higher at 1.56% in 2014. The margin dropped significantly to -1.42% in 2015 and deepened to -3.15% in 2016, aligning with the years of economic profit losses. In 2017, the margin rebounded to 1.28%, indicating an improvement in profit relative to sales. This margin trend underscores periods of diminished profitability followed by signs of recovery.

Overall Analysis

The financial data presents a cyclical performance characterized by initial growth in sales and profitability, followed by a downturn with losses both in economic profit and margin around 2015 and 2016. The company managed to regain positive profitability by 2017, albeit with sales not returning to the previous peak levels observed in 2014. The volatility in economic profit and margin suggests the presence of operational or market challenges during the mid-period that impacted cost efficiency or revenue generation, with subsequent strategies potentially supporting recovery.