Monsanto Co. (NYSE:MON)

Net Operating Profit After Taxes (NOPAT)

The net operating profit after taxes showed an overall fluctuating trend from 2012 to 2017. It increased from $2,247 million in 2012 to a peak of $2,743 million in 2013 before slightly declining to $2,633 million in 2014. In 2015 and 2016, NOPAT decreased more substantially, reaching a low of $1,816 million in 2016. A recovery is observed in 2017, with NOPAT rising again to $2,582 million.

Cost of Capital

The cost of capital percentage displayed a mild variation over the six-year period. It started at 15.96% in 2012, increased marginally to 16.08% in 2013, then decreased steadily to its lowest point of 14.11% in 2015. From 2015 onwards, the cost of capital showed a slight upward movement, ending at 14.68% in 2017.

Invested Capital

Invested capital grew consistently from $14,553 million in 2012 to $18,327 million in 2015, indicating increased capital deployment over this period. However, a marked decline occurred in 2016, dropping to $15,963 million, followed by a modest increase to $16,366 million in 2017.

Economic Profit

Economic profit was positive in 2013 and 2014, reaching $206 million and $233 million, respectively, indicating value creation in these years. However, there were negative economic profits in 2012, 2015, and 2016, with the most significant losses in 2016 at -$442 million. A return to positive economic profit was recorded in 2017, amounting to $179 million. This pattern suggests volatility in the company’s ability to generate returns above its cost of capital during the period analyzed.

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 Trends

The economic profit exhibited considerable volatility over the six-year period. It started with a negative value of -76 million US dollars in 2012, shifted to positive figures in 2013 and 2014 with 206 million and 233 million respectively, then declined sharply to negative values in 2015 and 2016, reaching -225 million and -442 million. In 2017, economic profit rebounded to a positive 179 million. This pattern indicates fluctuating profitability and challenges in maintaining consistent economic gains.

Invested Capital Movement

Invested capital generally increased from 14,553 million US dollars in 2012 to a peak of 18,327 million in 2015. Afterward, it decreased to 15,963 million in 2016 before slightly rising to 16,366 million in 2017. The peak in 2015 suggests a period of substantial investment, followed by a notable decline in the subsequent year, possibly reflecting disinvestment or asset optimization strategies.

Economic Spread Ratio Analysis

The economic spread ratio, expressed as a percentage, followed a pattern similar to economic profit. It started negative at -0.52% in 2012, climbed to positive values exceeding 1% through 2013 and 2014, then turned negative again with -1.23% in 2015 and further decreased to -2.77% in 2016. In 2017, the ratio recovered to 1.09%. This ratio's fluctuations align with the changes in economic profit, highlighting varying returns over the invested capital during the period.

Overall Insights

The company experienced a cyclical financial performance characterized by alternating periods of profit and loss. Investments were ramped up until 2015, with a subsequent reduction, which corresponded with significant variance in economic profit and spread ratio. The recovery in 2017 indicates a positive turnaround after consecutive years of negative profitability.

The financial data over the six-year period indicates fluctuating performance in the company's economic profit and related metrics, with some periods exhibiting positive results and others showing declines.

Economic Profit

The economic profit figures reveal volatility, beginning with a negative value of -76 million US dollars in 2012. This shifted to positive territory in 2013 and 2014, reaching 206 million and 233 million US dollars respectively. However, there was a marked decline afterward, with significant negative economic profits of -225 million and -442 million US dollars in 2015 and 2016. The year 2017 shows a recovery, with economic profit returning to a positive value of 179 million US dollars.

Adjusted Net Sales

Adjusted net sales generally increased from 2012 to 2014, moving from approximately 13.4 billion to nearly 15.7 billion US dollars, reflecting growth in sales volume or pricing. Thereafter, net sales experienced a decline in 2015 and 2016, dropping to roughly 14.9 billion and 13.7 billion US dollars respectively. The figure rose again in 2017 to about 14.9 billion US dollars, indicating some recovery in sales.

Economic Profit Margin

The economic profit margin, expressed as a percentage, mirrors the trend in economic profit. It started negative in 2012 at -0.56%, improved in 2013 and 2014 to 1.39% and 1.49%, demonstrating better profitability relative to sales. The margin turned negative again in 2015 and 2016, reaching -1.5% and -3.23%, highlighting reduced economic profitability during those years. In 2017, the margin rebounded to a positive 1.2%, corresponding with the recovery in economic profit.

Overall, the data points to cyclical fluctuations in profitability and sales, with notable declines during the mid-period years and signs of recovery in the final year observed. The alignment of economic profit and margin trends with adjusted net sales suggests that the variations in sales volumes or pricing strategies significantly influenced the company's economic performance over this timeframe.