Monsanto Co. (NYSE:MON)

Return on Assets (ROA)

The Return on Assets displayed a generally stable yet slightly fluctuating pattern over the analyzed periods. Initially, data starts from May 31, 2012, with a value of 10.11%, followed by a modest decline to 8.48% by February 29, 2016. Subsequently, the ROA exhibited a recovery trend, rising steadily until November 30, 2017, where it reached approximately 10.98%. This indicates that the company maintained a consistent ability to generate profit from its assets, with some short-term volatility but a positive rebound in later periods.

Financial Leverage

Financial Leverage ratios began at 1.85 in November 30, 2011, and showed a decreasing trend until May 31, 2013, reaching a low of 1.56. However, starting August 31, 2014, there was a pronounced increase in leverage, peaking at 6.03 in November 30, 2015. After this peak, leverage declined gradually to 2.93 by February 28, 2018. The fluctuation suggests periods of higher borrowing or obligations relative to equity, peaking around late 2015, followed by significant deleveraging efforts or changes in capital structure in subsequent years.

Return on Equity (ROE)

The ROE data show an overall increasing trend with considerable volatility. Beginning from May 31, 2012, at 17.28%, it rose steadily, reaching a substantial peak of 51.08% on November 30, 2015. Following this, the ROE experienced a decline to 20.2% by May 31, 2016. Thereafter, it recovered and stabilized in the range of 30% to 36% through February 28, 2018. This trend indicates fluctuating profitability relative to shareholders’ equity, with exceptional returns in late 2015, possibly linked to higher leverage levels, and a subsequent normalization period with robust returns maintained thereafter.

Overall Insights

The data reflect a company that experienced a strategic increase in financial leverage around 2014-2015, coinciding with a spike in ROE to over 50%, suggesting high financial risk accompanied by elevated shareholder returns during that time. The subsequent decrease in leverage indicates a shift towards a more conservative capital structure. ROA remained relatively stable despite fluctuations in leverage and ROE, implying consistent asset profitability. The patterns suggest effective management of assets but with changing financial risk levels over the periods analyzed.

Net Profit Margin

The net profit margin shows a generally stable trend starting from November 2012 through February 2015, with values fluctuating between approximately 15% and 17.5%. From February 2015, a gradual decline is observed, reaching a low of 7.76% in August 2016. Subsequently, there is a recovery trend with the margin increasing steadily to reach roughly 17% by February 2018. This pattern indicates a period of margin compression followed by a gradual improvement in profitability.

Asset Turnover

The asset turnover ratio remains relatively consistent throughout the entire period, ranging mostly between 0.62 and 0.72. Minor fluctuations occur without a clear upward or downward trend, suggesting consistent efficiency in utilizing assets to generate revenue over time.

Financial Leverage

Financial leverage exhibits notable variability. Initially, the ratio decreases from 1.85 in November 2011 to around 1.56 in May 2013, followed by a sharp increase peaking at 6.03 in November 2015. After this peak, leverage declines and stabilizes between approximately 2.9 and 3.5 up to February 2018. The substantial spike around 2015 indicates a period of significantly increased borrowing or use of debt relative to equity, which later moderates.

Return on Equity (ROE)

ROE displays substantial volatility. From November 2012 to February 2014, ROE remains in the 17% to 20% range. Beginning in May 2014, a striking rise occurs, peaking at 51.08% in November 2015. This peak aligns with the surge in financial leverage, suggesting leverage amplified returns during this time. Following this peak, ROE declines sharply to around 20.2% by August 2016, then recovers moderately, fluctuating between approximately 31% and 36% through February 2018. This pattern reflects the impact of financial leverage and net profit margin changes on shareholder returns.

Summary

Overall, the data reveal a period of stable profitability to early 2015, followed by heightened financial leverage that significantly boosted ROE despite a falling net profit margin. The subsequent reduction in leverage coincides with a normalization of ROE and a rebound in net profit margin. Asset turnover remains stable, indicating steady operational efficiency. The interplay between leverage and returns is a key factor governing the observed ROE volatility.

The analysis of the quarterly financial data reveals several noteworthy trends in the company's financial ratios and margins over the periods covered.

Tax Burden

The tax burden ratio remained relatively stable from November 2012 through November 2015, maintaining values around 0.70 to 0.74, indicating consistent tax expense relative to pre-tax earnings. However, starting in early 2016, the ratio showed some volatility, dipping to around 0.64 - 0.66 before recovering and reaching a peak of 0.83 by February 2018, suggesting changes in tax liabilities or tax strategies over time.

Interest Burden

The interest burden ratio displayed a gradual decline between November 2012 and February 2016, dropping from approximately 0.95 to 0.77, which may indicate an increasing impact of interest expenses on earnings before tax. After this period, the ratio somewhat stabilized, fluctuating between 0.80 and 0.87 from mid-2016 through early 2018, potentially reflecting changes in debt costs or levels.

EBIT Margin

EBIT margin percentages were relatively high and stable from late 2012 until mid-2015, frequently exceeding 24%, with a peak at 26.4% in February 2015. From mid-2015, a noticeable decline occurred, bottoming around 15% in August 2016 before recovering to levels above 23% by early 2018. This suggests a period of margin compression followed by gradual improvement.

Asset Turnover

The asset turnover ratio showed moderate fluctuations, generally ranging from 0.62 to 0.72 across the years. There was no strong directional trend, indicating relatively stable efficiency in using assets to generate revenue throughout the examined periods.

Financial Leverage

Financial leverage exhibited a rising trend from 1.56 in mid-2013 to a peak of 6.03 in November 2015, indicating increased reliance on debt financing or higher asset base relative to equity. Subsequently, leverage decreased steadily, falling to around 2.93 by early 2018, suggesting deleveraging or a reduction in debt levels in the later periods.

Return on Equity (ROE)

ROE showed considerable variability, increasing from approximately 17% in late 2012 to a peak exceeding 51% in November 2015, coinciding with the peak in financial leverage. Following this peak, ROE declined markedly to around 20% by mid-2016 but then recovered, fluctuating around 30-36% through early 2018. This pattern suggests that changes in leverage and margin performance substantially influenced equity profitability.

In summary, the company exhibited stable tax and interest burdens initially but faced margin contraction and higher financial leverage culminating around late 2015. This was accompanied by a pronounced peak in ROE, likely driven by increased leverage. The subsequent periods saw deleveraging and margin recovery, resulting in more moderate but still healthy returns on equity. Asset turnover remained consistently stable, underscoring steady operational efficiency.

Net Profit Margin

The net profit margin shows a generally positive trend over the reported periods, starting around 15.14% in late 2011 and peaking near 17.49% in mid-2014. Subsequently, there is a noticeable decline through 2015 and 2016, hitting a low of approximately 7.76% in mid-2016. From early 2017 onward, profitability improves steadily, reaching roughly 17.07% by early 2018. This pattern indicates periods of both profitability strengthening and weakening, with a mid-term trough followed by recovery.

Asset Turnover

Asset turnover remains relatively stable across the periods, fluctuating mostly between 0.62 and 0.72. No significant upward or downward trend is evident, suggesting that the efficiency with which the company utilizes its assets to generate sales has remained consistent. Some minor fluctuations occur, but they generally stay within a narrow range, reflecting steady operational activity without major shifts in asset usage.

Return on Assets (ROA)

Return on assets follows a trajectory similar to the net profit margin, beginning around 10% in late 2011 and increasing to a high above 12% in late 2012 and early 2014. Thereafter, a decline is observed from 2015 through mid-2016, reaching lows slightly above 5%. From late 2016 onwards, ROA shows recovery and gradual improvement, rising back to above 10% by early 2018. This dynamic suggests that the company’s ability to generate profit from its asset base faced challenges mid-term but subsequently regained strength.

Overall Insights

The financial ratios indicate a period of relatively strong profitability and efficiency in the earlier years, followed by a period of reduced profitability around 2015 and 2016. Despite these challenges, asset usage remained steady, implying operational stability. The subsequent recovery in net profit margin and return on assets by early 2018 reflects an effective response to prior downturns, improving financial performance and asset profitability towards the end of the observed period.

The financial data reveals several key trends in the company's performance metrics over the analyzed periods.

Tax Burden Ratio

The tax burden ratio demonstrates a gradual increase from approximately 0.69 in late 2012 to values above 0.7 in most subsequent quarters. This indicates a relatively stable but slightly increasing proportion of earnings retained after taxes throughout the timeline, with some fluctuations observed around early 2016 when it dipped close to 0.64 but subsequently rose to an all-time high of approximately 0.83 by early 2018.

Interest Burden Ratio

This ratio remains stable near 0.94-0.95 from late 2012 through late 2014, suggesting limited interest expense impact during this time. However, starting from 2015, there is a clear downward trend, reaching a low near 0.77 in mid-2016, reflecting a potential increase in interest expenses or leverage effects. Interestingly, from late 2016 onward, the ratio recovers steadily back towards 0.87 by early 2018, signaling some improvement in managing interest costs or debt levels.

EBIT Margin (%)

The EBIT margin shows a general declining pattern over the observed periods. It peaks around 26.4% in early 2015 but then declines significantly to nearly 15% by mid-2016. After this trough, the margin recovers partially to stabilize around 23-24% towards the end of the timeline. This suggests that operational profitability faced downward pressure during 2015 and early 2016, followed by a recovery phase.

Asset Turnover Ratio

The asset turnover ratio fluctuates moderately around the mid-0.6 range throughout the periods. It starts near 0.67 in late 2012, shows occasional troughs near 0.62-0.63, and peaks reaching approximately 0.72 at a few points. The ratio maintains relative steadiness with no strong directional trend, indicating consistent efficiency in utilizing assets to generate revenue.

Return on Assets (ROA) (%)

ROA mirrors the trends observed in EBIT margin with an initial increase from about 10% in late 2012 to highs above 12% by late 2013 and early 2014. It then dips markedly to a low around 5% in mid-2016, highlighting a phase of reduced overall profitability relative to assets. Most recently, ROA shows recovery up to approximately 11% by early 2018, aligning with improvements in operating earnings and asset utilization.

Overall, the data indicate periods of operational and financial stress during 2015 and 2016, particularly noted in declines in EBIT margin and ROA, as well as a worsening interest burden. Following these challenges, gradual improvements are evident across profitability and financial burden ratios approaching early 2018, suggesting a recovery trajectory in the company's financial performance and efficiency metrics.

The financial data over the analyzed quarters reveals several notable trends in profitability and burden ratios.

Tax Burden

The tax burden ratio shows a relatively stable pattern from late 2012 through early 2015, hovering around 0.70 to 0.74. Starting in 2015, there is a slight upward trend, reaching a peak of 0.83 by early 2018. This increase suggests a gradual growth in the proportion of earnings retained after tax, which could indicate improvements in tax efficiency or changes in tax regulation.

Interest Burden

The interest burden ratio maintains a high level near 0.95 in the early periods (late 2012 to late 2013), indicating low interest expense relative to EBIT. However, from 2014 onward, the ratio declines steadily to a low of 0.77 by mid-2016, implying a higher relative interest expense or increased debt burden. After mid-2016, the ratio stabilizes somewhat in the 0.85 to 0.87 range through early 2018, reflecting a partial recovery or better interest cost management.

EBIT Margin

The EBIT margin consistently remains in the mid-20% range through late 2014, peaking at 26.4% in mid-2015. Subsequently, there is a marked decline, reaching a low near 15% by mid-2016. Following this trough, the EBIT margin recovers gradually to the 23.5% range by early 2018. This pattern suggests cyclical variations in operating profitability, with a significant downturn around 2015-2016 followed by steady improvement.

Net Profit Margin

The net profit margin exhibits a broadly similar trajectory to the EBIT margin. It starts around 15% to 17% through 2014 and early 2015, then experiences a sharp decline down to a low of approximately 7.8% by mid-2016. Thereafter, it improves steadily, reaching over 17% by early 2018. This reflects the combined impact of operating profitability, tax burden, and interest expense on the bottom line, with net profitability recovering after a period of stress.

Overall, the data illustrates a period of strong operating and net profitability until about 2014-2015, followed by a downturn presumably affected by increased interest expenses and possibly other operational challenges. From mid-2016 onward, there is a clear recovery trend in margins and an improving tax burden ratio, signaling positively towards enhanced financial performance and cost management in the latter periods.