Adjusted Financial Ratios (Summary)
Adjusted Total Asset Turnover
Adjusted Current Ratio
Adjusted Debt to Equity
Adjusted Debt to Capital
Adjusted Financial Leverage
Adjusted Net Profit Margin
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Reynolds American Inc., adjusted financial ratios

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Activity Ratio
Total Asset Turnover
Reported	0.33	0.28	0.80	0.78	0.74
Adjusted	0.33	0.28	0.82	0.80	0.77
Liquidity Ratio
Current Ratio
Reported	0.85	1.17	0.94	1.19	1.28
Adjusted	0.89	1.01	0.80	1.07	1.10
Solvency Ratios
Debt to Equity
Reported	0.61	0.96	1.12	0.99	0.97
Adjusted	0.42	0.63	1.15	0.94	1.02
Debt to Capital
Reported	0.38	0.49	0.53	0.50	0.49
Adjusted	0.29	0.39	0.54	0.49	0.51
Financial Leverage
Reported	2.35	2.92	3.36	2.98	3.15
Adjusted	1.62	1.89	3.32	2.76	3.15
Profitability Ratios
Net Profit Margin
Reported	36.05%	21.86%	12.15%	14.36%	10.40%
Adjusted	38.66%	17.27%	7.77%	19.25%	10.68%
Return on Equity (ROE)
Reported	27.97%	17.82%	32.51%	33.25%	24.20%
Adjusted	20.72%	9.30%	21.20%	42.21%	25.89%
Return on Assets (ROA)
Reported	11.89%	6.11%	9.67%	11.15%	7.68%
Adjusted	12.76%	4.91%	6.38%	15.31%	8.21%

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

Financial ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Reynolds American Inc. adjusted total asset turnover ratio deteriorated from 2014 to 2015 but then slightly improved from 2015 to 2016.
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Reynolds American Inc. adjusted current ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016 not reaching 2014 level.
Adjusted debt-to-equity ratio	A solvency ratio calculated as adjusted total debt divided by adjusted total equity.	Reynolds American Inc. adjusted debt-to-equity ratio improved from 2014 to 2015 and from 2015 to 2016.
Adjusted debt-to-capital ratio	A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity.	Reynolds American Inc. adjusted debt-to-capital ratio improved from 2014 to 2015 and from 2015 to 2016.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Reynolds American Inc. adjusted financial leverage ratio decreased from 2014 to 2015 and from 2015 to 2016.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Reynolds American Inc. adjusted net profit margin ratio improved from 2014 to 2015 and from 2015 to 2016.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted total equity.	Reynolds American Inc. adjusted ROE deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Reynolds American Inc. adjusted ROA deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.

Reynolds American Inc., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Reported
Selected Financial Data (US$ in millions)
Net sales, includes excise taxes	16,846)	14,884)	12,096)	11,966)	12,227)
Total assets	51,095)	53,224)	15,196)	15,402)	16,557)
Activity Ratio
Total asset turnover¹	0.33	0.28	0.80	0.78	0.74
Adjusted
Selected Financial Data (US$ in millions)
Adjusted net sales, includes excise taxes²	16,918)	14,885)	12,080)	11,972)	12,227)
Adjusted total assets³	51,259)	52,372)	14,716)	15,051)	15,899)
Activity Ratio
Adjusted total asset turnover⁴	0.33	0.28	0.82	0.80	0.77

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Total asset turnover = Net sales, includes excise taxes ÷ Total assets
= 16,846 ÷ 51,095 = 0.33

² Adjusted net sales, includes excise taxes. See details »

³ Adjusted total assets. See details »

⁴ 2016 Calculation
Adjusted total asset turnover = Adjusted net sales, includes excise taxes ÷ Adjusted total assets
= 16,918 ÷ 51,259 = 0.33

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Activity ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	Reynolds American Inc. adjusted total asset turnover ratio deteriorated from 2014 to 2015 but then slightly improved from 2015 to 2016.

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Reported
Selected Financial Data (US$ in millions)
Current assets	4,238)	6,187)	3,323)	3,655)	4,812)
Current liabilities	4,985)	5,291)	3,544)	3,076)	3,769)
Liquidity Ratio
Current ratio¹	0.85	1.17	0.94	1.19	1.28
Adjusted
Selected Financial Data (US$ in millions)
Adjusted current assets²	4,377)	5,309)	2,824)	3,255)	4,096)
Adjusted current liabilities³	4,919)	5,258)	3,512)	3,028)	3,727)
Liquidity Ratio
Adjusted current ratio⁴	0.89	1.01	0.80	1.07	1.10

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Current ratio = Current assets ÷ Current liabilities
= 4,238 ÷ 4,985 = 0.85

² Adjusted current assets. See details »

³ Adjusted current liabilities. See details »

⁴ 2016 Calculation
Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 4,377 ÷ 4,919 = 0.89

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Liquidity ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities.	Reynolds American Inc. adjusted current ratio improved from 2014 to 2015 but then slightly deteriorated from 2015 to 2016 not reaching 2014 level.

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Reported
Selected Financial Data (US$ in millions)
Total debt	13,165)	17,447)	5,083)	5,099)	5,095)
Shareholders’ equity	21,711)	18,252)	4,522)	5,167)	5,257)
Solvency Ratio
Debt to equity¹	0.61	0.96	1.12	0.99	0.97
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total debt²	13,190)	17,473)	5,111)	5,160)	5,153)
Adjusted shareholders’ equity³	31,562)	27,643)	4,429)	5,461)	5,044)
Solvency Ratio
Adjusted debt to equity⁴	0.42	0.63	1.15	0.94	1.02

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Debt to equity = Total debt ÷ Shareholders’ equity
= 13,165 ÷ 21,711 = 0.61

² Adjusted total debt. See details »

³ Adjusted shareholders’ equity. See details »

⁴ 2016 Calculation
Adjusted debt to equity = Adjusted total debt ÷ Adjusted shareholders’ equity
= 13,190 ÷ 31,562 = 0.42

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Solvency ratio	Description	The company
Adjusted debt-to-equity ratio	A solvency ratio calculated as adjusted total debt divided by adjusted total equity.	Reynolds American Inc. adjusted debt-to-equity ratio improved from 2014 to 2015 and from 2015 to 2016.

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Reported
Selected Financial Data (US$ in millions)
Total debt	13,165)	17,447)	5,083)	5,099)	5,095)
Total capital	34,876)	35,699)	9,605)	10,266)	10,352)
Solvency Ratio
Debt to capital¹	0.38	0.49	0.53	0.50	0.49
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total debt²	13,190)	17,473)	5,111)	5,160)	5,153)
Adjusted total capital³	44,752)	45,116)	9,540)	10,621)	10,197)
Solvency Ratio
Adjusted debt to capital⁴	0.29	0.39	0.54	0.49	0.51

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Debt to capital = Total debt ÷ Total capital
= 13,165 ÷ 34,876 = 0.38

² Adjusted total debt. See details »

³ Adjusted total capital. See details »

⁴ 2016 Calculation
Adjusted debt to capital = Adjusted total debt ÷ Adjusted total capital
= 13,190 ÷ 44,752 = 0.29

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Solvency ratio	Description	The company
Adjusted debt-to-capital ratio	A solvency ratio calculated as adjusted total debt divided by adjusted total debt plus adjusted total equity.	Reynolds American Inc. adjusted debt-to-capital ratio improved from 2014 to 2015 and from 2015 to 2016.

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Reported
Selected Financial Data (US$ in millions)
Total assets	51,095)	53,224)	15,196)	15,402)	16,557)
Shareholders’ equity	21,711)	18,252)	4,522)	5,167)	5,257)
Solvency Ratio
Financial leverage¹	2.35	2.92	3.36	2.98	3.15
Adjusted
Selected Financial Data (US$ in millions)
Adjusted total assets²	51,259)	52,372)	14,716)	15,051)	15,899)
Adjusted shareholders’ equity³	31,562)	27,643)	4,429)	5,461)	5,044)
Solvency Ratio
Adjusted financial leverage⁴	1.62	1.89	3.32	2.76	3.15

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Financial leverage = Total assets ÷ Shareholders’ equity
= 51,095 ÷ 21,711 = 2.35

² Adjusted total assets. See details »

³ Adjusted shareholders’ equity. See details »

⁴ 2016 Calculation
Adjusted financial leverage = Adjusted total assets ÷ Adjusted shareholders’ equity
= 51,259 ÷ 31,562 = 1.62

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Reynolds American Inc. adjusted financial leverage ratio decreased from 2014 to 2015 and from 2015 to 2016.

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Reported
Selected Financial Data (US$ in millions)
Net income	6,073)	3,253)	1,470)	1,718)	1,272)
Net sales, includes excise taxes	16,846)	14,884)	12,096)	11,966)	12,227)
Profitability Ratio
Net profit margin¹	36.05%	21.86%	12.15%	14.36%	10.40%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted net income²	6,541)	2,571)	939)	2,305)	1,306)
Adjusted net sales, includes excise taxes³	16,918)	14,885)	12,080)	11,972)	12,227)
Profitability Ratio
Adjusted net profit margin⁴	38.66%	17.27%	7.77%	19.25%	10.68%

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
Net profit margin = 100 × Net income ÷ Net sales, includes excise taxes
= 100 × 6,073 ÷ 16,846 = 36.05%

² Adjusted net income. See details »

³ Adjusted net sales, includes excise taxes. See details »

⁴ 2016 Calculation
Adjusted net profit margin = 100 × Adjusted net income ÷ Adjusted net sales, includes excise taxes
= 100 × 6,541 ÷ 16,918 = 38.66%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Reynolds American Inc. adjusted net profit margin ratio improved from 2014 to 2015 and from 2015 to 2016.

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Reported
Selected Financial Data (US$ in millions)
Net income	6,073)	3,253)	1,470)	1,718)	1,272)
Shareholders’ equity	21,711)	18,252)	4,522)	5,167)	5,257)
Profitability Ratio
ROE¹	27.97%	17.82%	32.51%	33.25%	24.20%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted net income²	6,541)	2,571)	939)	2,305)	1,306)
Adjusted shareholders’ equity³	31,562)	27,643)	4,429)	5,461)	5,044)
Profitability Ratio
Adjusted ROE⁴	20.72%	9.30%	21.20%	42.21%	25.89%

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
ROE = 100 × Net income ÷ Shareholders’ equity
= 100 × 6,073 ÷ 21,711 = 27.97%

² Adjusted net income. See details »

³ Adjusted shareholders’ equity. See details »

⁴ 2016 Calculation
Adjusted ROE = 100 × Adjusted net income ÷ Adjusted shareholders’ equity
= 100 × 6,541 ÷ 31,562 = 20.72%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted total equity.	Reynolds American Inc. adjusted ROE deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level.

	Dec 31, 2016	Dec 31, 2015	Dec 31, 2014	Dec 31, 2013	Dec 31, 2012
Reported
Selected Financial Data (US$ in millions)
Net income	6,073)	3,253)	1,470)	1,718)	1,272)
Total assets	51,095)	53,224)	15,196)	15,402)	16,557)
Profitability Ratio
ROA¹	11.89%	6.11%	9.67%	11.15%	7.68%
Adjusted
Selected Financial Data (US$ in millions)
Adjusted net income²	6,541)	2,571)	939)	2,305)	1,306)
Adjusted total assets³	51,259)	52,372)	14,716)	15,051)	15,899)
Profitability Ratio
Adjusted ROA⁴	12.76%	4.91%	6.38%	15.31%	8.21%

Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).

¹ 2016 Calculation
ROA = 100 × Net income ÷ Total assets
= 100 × 6,073 ÷ 51,095 = 11.89%

² Adjusted net income. See details »

³ Adjusted total assets. See details »

⁴ 2016 Calculation
Adjusted ROA = 100 × Adjusted net income ÷ Adjusted total assets
= 100 × 6,541 ÷ 51,259 = 12.76%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Reynolds American Inc. adjusted ROA deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level.

Reynolds American Inc. (NYSE:RAI)

Adjusted Financial Ratios

Adjusted Financial Ratios (Summary)

Reynolds American Inc., Financial Ratios: Reported vs. Adjusted

Adjusted Total Asset Turnover

Adjusted Current Ratio

Adjusted Debt to Equity

Adjusted Debt to Capital

Adjusted Financial Leverage

Adjusted Net Profit Margin

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)