Newmont Corp. (NYSE:NEM)

Return on Assets (ROA) Trend

The Return on Assets shows a positive performance starting from March 2020 through March 2022, with values peaking at 9.8% in September 2020, followed by a gradual decline to 2% by September 2022. Beginning in December 2022, ROA turns negative and continues to deteriorate through March 2024, reaching -4.83%. This indicates a weakening operational efficiency in utilizing assets to generate profits over the recent periods.

Financial Leverage Trend

Financial leverage remained relatively stable around a ratio of 1.9 from March 2019 to December 2021, with minor fluctuations. Starting in December 2021, there is a slight upward trend, peaking at 2.0 in December 2023, before marginally declining to 1.92 by March 2024. The modest increase suggests a gradual rise in the company’s use of debt relative to equity during this period.

Return on Equity (ROE) Trend

Return on Equity follows a generally similar pattern to ROA, with strong positive returns beginning in March 2020 through early 2022, reaching a high of 17.76% in September 2020. Subsequently, ROE declines steadily, falling into negative territory by December 2022 and worsening to -9.26% by March 2024. This decline highlights reduced profitability available to shareholders, coinciding with the period of increased financial leverage and negative ROA.

Overall Insights

The data indicates a period of robust profitability from early 2020 to mid-2021, after which profitability measures—both ROA and ROE—have declined significantly, turning negative by late 2022. Financial leverage has increased slightly during this period, which, combined with declining returns, suggests a potential increase in financial risk and decreased effectiveness in generating returns on equity and assets. This trend warrants further investigation into underlying factors affecting performance and capital structure management.

The financial analysis over the observed periods reveals several important trends and shifts.

Net Profit Margin (%)

Starting from March 2020, the net profit margin exhibited an initial increase, reaching its peak of 36.79% in September 2020. Following this peak, a pronounced decline is observed. By March 2024, the net profit margin reflects significant negative values, indicating losses, with the margin dropping to -20.33%. This deterioration suggests challenges in maintaining profitability over the latter periods.

Asset Turnover (ratio)

The asset turnover ratio indicating efficiency in utilizing assets to generate revenue shows a gradual upward trend from 0.24 in March 2020 to around 0.31 in December 2020. Subsequently, the ratio stabilizes around 0.30-0.31 for a few quarters but declines steadily from 0.31 in December 2022 to a low of 0.21 in March 2024. This decline in asset turnover towards the end of the period signals reduced efficiency in asset utilization.

Financial Leverage (ratio)

Financial leverage ratios remain relatively stable throughout the examined timeframe, fluctuating modestly between approximately 1.79 and 2.00. There is a slight increasing trend towards the recent quarters, with leverage rising to around 1.91-1.92 in early 2024, suggesting a moderate increase in reliance on debt financing.

Return on Equity (ROE) (%)

ROE follows a pattern somewhat similar to net profit margin, initially increasing and reaching a peak of 17.76% in September 2020. After this peak, ROE declines markedly, turning negative from around March 2023 onward, with a low near -9.26% by March 2024. This negative trend reflects overall diminished shareholder value generation and possible operational or market difficulties affecting earnings.

Overall, the data indicates strong profitability and efficiency until late 2020, followed by a sustained period of declining performance. Profit margins and returns on equity have turned negative, and asset turnover has decreased, signaling reduced operational efficiency. Financial leverage remains stable but shows a slight upward trend, which, combined with declining profitability, could present elevated financial risks moving forward.

Tax Burden

The tax burden ratio shows a general decreasing trend from 0.77 in Q1 2020 to values in the range of approximately 0.49 to 0.61 during 2022, indicating a decline in the proportion of pre-tax income retained after taxes. Thereafter, data for 2023 and early 2024 is missing, thus limiting further analysis.

Interest Burden

The interest burden ratio remained relatively stable from Q1 2020 through 2022, mostly fluctuating around 0.86 to 0.93. Data become sparse after the first quarter of 2023, with some negative values recorded in mid-2023, suggesting possible irregularities or one-time effects impacting interest expense or earnings before interest and taxes during that period.

EBIT Margin

The EBIT margin experienced a notable decrease over the analyzed periods. Starting from a high of 47.6% in Q3 2019, it steadily declined to around 15.57% by Q4 2022. Subsequently, the margin fell sharply into negative territory by late 2023 and into Q1 2024, reaching approximately -13.92%. This significant downturn indicates worsening operational profitability over time, especially pronounced in the latest periods.

Asset Turnover

The asset turnover ratio displayed a modest upward trend from approximately 0.24 in early 2019 to a peak near 0.31 during 2021 and 2022. A slight reduction followed in 2023, dipping to about 0.21 before partial recovery to 0.24 in Q1 2024. This suggests an initial improvement in asset utilization which later weakened somewhat.

Financial Leverage

Financial leverage remained relatively stable, fluctuating narrowly between 1.79 and 2.0 over the entire analysis period. Slight increases were observable towards the end of 2022 and into 2023, indicating a marginal rise in reliance on debt financing or other liabilities relative to equity.

Return on Equity (ROE)

ROE underwent a marked decline, starting above 17% in late 2019, then decreasing consistently to below 5% by late 2022. In 2023 and the first quarter of 2024, ROE fell into negative territory, with the lowest values approximating -9.26%. This trend reflects deteriorating profitability from the shareholders' perspective, aligned with the decline in EBIT margins and tax burden adjustments.

Net Profit Margin

The net profit margin demonstrates significant volatility over the reported periods. Starting from the first available data in March 2020, it peaked around September 2020 at 36.79%, indicating a strong profitability phase during that time. However, from late 2020 onwards, there is a clear declining trend. By the end of 2021, the margin had decreased to approximately 16.67%, and this downward trajectory continued into 2022 and 2023. Notably, the margin turned negative beginning in the first quarter of 2023 and reached a low of -21.11% by March 2024, reflecting considerable profitability pressures and potentially sustained losses.

Asset Turnover

The asset turnover ratio displays a relatively stable pattern, generally oscillating between 0.24 and 0.31 throughout the observed quarters. Initially, in early 2020, the ratio was around 0.24, and it improved slightly to values near 0.31 by late 2020 and early 2021, suggesting a modest increase in the efficiency of asset use to generate revenue. However, from mid-2022 onward, the ratio shows a mild decreasing trend, dropping from roughly 0.31 to 0.21-0.24 by early 2024, indicating some deterioration in asset utilization efficiency over time.

Return on Assets (ROA)

The return on assets follows a pattern similar to that of net profit margin, with performance peaking in the middle of 2020 at approximately 9.8%. Subsequently, there is a steady decline, with ROA dropping below the positive threshold after 2022. By 2023 and early 2024, ROA records negative values, reaching -4.83% by March 2024. This negative return indicates that the company's assets were not generating adequate earnings during these recent periods, reflecting overall diminished operational profitability and asset efficiency.

Overall Insights

The combined analysis of these key financial ratios points to a period of robust profitability and asset efficiency in 2020, followed by a gradual but pronounced decline ending in negative profitability and returns by early 2024. The diminishing net profit margin and ROA suggest increasing cost pressures, shrinking revenues, or other operational challenges. Meanwhile, the declining asset turnover toward early 2024 indicates waning effectiveness in leveraging assets for revenue generation. Together, these trends flag potential financial difficulties and suggest a need for strategic reassessment to restore profitability and operational leverage.

The financial data reveals varying trends over the analyzed periods, highlighting fluctuations in profitability, efficiency, and financial burdens.

Tax Burden

The tax burden ratio, available from March 2020 onward, initially remained relatively stable between approximately 0.77 and 0.84 through 2020. Subsequently, it showed a downward trend, reaching a low of 0.49 by mid-2022. After this, a moderate recovery occurred with the ratio increasing to 0.61 by the end of 2022. However, the data for 2023 is missing, limiting further analysis.

Interest Burden

The interest burden ratio stayed fairly consistent in 2020 and 2021, fluctuating narrowly around 0.91 to 0.94, indicating stable interest expense relative to earnings before interest and taxes. Starting in 2022, a gradual decline is noticeable, with values decreasing to 0.86-0.87. The few data points for 2023 show irregular and negative numbers, suggesting missing or anomalous data that precludes definitive interpretation for the latest periods.

EBIT Margin

The EBIT margin peaked around the third quarter of 2019 at 47.6%, afterward showing a downward trajectory. Through 2020 and 2021, margins decreased steadily from the low 40s to below 20%. This declining trend continued into 2022 and deteriorated further into negative territory by late 2023 and early 2024, ending near -14%. These movements indicate a marked erosion of operating profitability over time.

Asset Turnover

Asset turnover exhibited a gradual improvement from 0.24 in early 2019 to about 0.31 by mid-2021 and maintained at that level through 2022, reflecting efficiency gains in utilizing assets to generate revenues. However, in 2023, turnover ratios declined, with values falling to as low as 0.21 before slightly rebounding to 0.24, signaling a loss in operational efficiency during the latest periods.

Return on Assets (ROA)

Return on assets increased consistently from 7.02% in early 2019 to a peak near 9.8% in the third quarter of 2019, then declined significantly to around 2% by late 2021 and early 2022. From this point, ROA turned negative, worsening progressively through 2023 to nearly -5%, demonstrating a significant reduction in overall asset profitability and indicating operational and financial challenges.

Overall, the data portrays a company experiencing strong profitability and efficiency in 2019, followed by a gradual but steady decline in key profitability metrics and asset utilization from 2020 onwards. Both the EBIT margin and ROA notably deteriorated, turning negative in recent quarters, while asset turnover weakened slightly after prior gains. The tax and interest burdens showed some variability but remained relatively stable until the appearance of irregular data in 2023, complicating analysis for the most recent periods. These patterns suggest a declining operational and financial performance trajectory in the analyzed timeframe.

The analysis of financial ratios over the recorded periods reveals notable trends and shifts in profitability and financial burden metrics. The data begins from the first quarter of 2020, with some metrics unavailable in earlier quarters.

Tax Burden

The tax burden ratio initially shows a relatively high and stable pattern, recording values between 0.77 and 0.84 through the first two years. Starting in late 2021, there is a clear downward trend with the ratio dropping to 0.49 in the first quarter of 2022. It then begins to recover somewhat, increasing to 0.61 by the end of 2022. However, significant negative values appear in 2023, with a sharp decline to -16.5 in the first quarter and subsequent missing data, suggesting potential anomalies or extraordinary items affecting tax costs.

Interest Burden

The interest burden displays overall stability through 2020 and 2021 with ratios hovering between 0.86 and 0.94, indicating consistent interest expense impact relative to operating income. In 2022, this ratio declines more noticeably, dropping to 0.10 in the first quarter of 2022. Following this, the ratio turns negative in 2023, reaching lows such as -3.63, signaling abnormal or unusual interest expense effects. Data beyond mid-2023 is unavailable.

EBIT Margin

Operating profitability as measured by EBIT margin peaks at 47.6% in the third quarter of 2019 but declines steadily thereafter. The margin falls below 20% by early 2022 and continues decreasing into 2023, crossing into negative territory by the fourth quarter of 2023 with -0.33%. The trend suggests a weakening operating performance over the observed period, possibly impacted by increasing costs or reduced operating revenue.

Net Profit Margin

Net profitability follows a broadly similar downward trajectory as EBIT margin. Starting from high levels near 37% in late 2019, it decreases consistently, falling below 10% during 2022 and dropping into negative values from mid-2023 onward, reaching -21.11% in the first quarter of 2024. This pronounced decline indicates worsening bottom-line performance, potentially exacerbated by tax and interest expense volatility as reflected in the burden ratios.

In summary, the data reveals a trend of deteriorating profitability margins alongside unusual movement in tax and interest burden ratios in recent quarters. The period prior to 2022 demonstrates relatively stable operating and net margins with moderate financial burden ratios. Since 2022, the company appears to face increasing financial and operational challenges, reflected by declining margins and erratic tax and interest burden values, culminating in negative profitability in early 2024. These patterns suggest the need for further investigation into the underlying causes, including tax strategy, interest costs, and operational efficiency.