Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Reynolds American Inc., profitability ratios
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).
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Reynolds American Inc. gross profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Reynolds American Inc. operating profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Reynolds American Inc. net profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Reynolds American Inc. ROE deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
| ROA | A profitability ratio calculated as net income divided by total assets. | Reynolds American Inc. ROA deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level. |
Gross Profit Margin
Reynolds American Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | 7,662) | 5,987) | 4,413) | 4,558) | 3,983) | |
| Net sales, includes excise taxes | 16,846) | 14,884) | 12,096) | 11,966) | 12,227) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 45.48% | 40.22% | 36.48% | 38.09% | 32.58% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
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
Gross profit margin = 100 × Gross profit ÷ Net sales, includes excise taxes
= 100 × 7,662 ÷ 16,846 = 45.48%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Gross profit margin | Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. | Reynolds American Inc. gross profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
Operating Profit Margin
Reynolds American Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 10,569) | 6,953) | 2,531) | 3,132) | 2,214) | |
| Net sales, includes excise taxes | 16,846) | 14,884) | 12,096) | 11,966) | 12,227) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 62.74% | 46.71% | 20.92% | 26.17% | 18.11% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
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
Operating profit margin = 100 × Operating income ÷ Net sales, includes excise taxes
= 100 × 10,569 ÷ 16,846 = 62.74%
2 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Operating profit margin | A profitability ratio calculated as operating income divided by revenue. | Reynolds American Inc. operating profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
Net Profit Margin
Reynolds American Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| 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% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
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 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| Net profit margin | An indicator of profitability, calculated as net income divided by revenue. | Reynolds American Inc. net profit margin ratio improved from 2014 to 2015 and from 2015 to 2016. |
Return on Equity (ROE)
Reynolds American Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| 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% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
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 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROE | A profitability ratio calculated as net income divided by shareholders’ equity. | Reynolds American Inc. ROE deteriorated from 2014 to 2015 but then improved from 2015 to 2016 not reaching 2014 level. |
Return on Assets (ROA)
Reynolds American Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| 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% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Altria Group Inc. | — | — | — | — | — | |
| Coca-Cola Co. | — | — | — | — | — | |
| PepsiCo Inc. | — | — | — | — | — | |
| Philip Morris International Inc. | — | — | — | — | — | |
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 Click competitor name to see calculations.
| Profitability ratio | Description | The company |
|---|---|---|
| ROA | A profitability ratio calculated as net income divided by total assets. | Reynolds American Inc. ROA deteriorated from 2014 to 2015 but then improved from 2015 to 2016 exceeding 2014 level. |