Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Cash Flow Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Debt to Equity since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Profitability Ratios (Summary)
YUM! Brands Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
The provided financial data reveals several trends in profitability and efficiency metrics over consecutive quarters.
- Operating Profit Margin
- The operating profit margin demonstrates relative stability with moderate fluctuations across the observed periods. After an initial absence of data, the margin begins around 14.38% in the first reported quarter, increasing to a peak of 16.89% in late 2011. Subsequently, it gradually declines through 2013, reaching a low point near 10.58% in late 2015, before recovering towards the end of the series to approximately 16.67%. This pattern indicates cyclical pressures but an overall ability to maintain a margin in the mid-teens by the final quarter.
- Net Profit Margin
- The net profit margin closely mirrors the trend observed in operating profit margin, though at generally lower levels. Starting at 10.45%, it rises to nearly 11.89% by late 2011, then experiences a downward drift through 2014 and early 2015, hitting lows around 7.0%. Afterwards, there is a notable rebound exceeding 12% by the end of the period. This suggests variable bottom-line profitability, influenced likely by operating performance and other financial factors.
- Return on Equity (ROE)
- ROE displays substantial volatility with exceptionally high values towards the end of the timeline. Initial readings hover around 70% in early 2011, diminishing steadily through 2013 and 2015 to roughly 50%-58%. However, an extraordinary spike is visible in mid-2016, with ROE surging to over 800%, which may indicate an anomaly, restructuring, or accounting event. Excluding this spike, the data shows a decline in efficiency generating shareholder returns over the period.
- Return on Assets (ROA)
- ROA maintains a relatively consistent range, generally between 11% and 18%. The metric peaks near 18% around late 2011, then falls during 2013 and 2015 to a low around 11%. It rebounds to approximately 17% by late 2016. This pattern suggests that asset utilization efficiency experienced some pressure but remained largely resilient, with recovery towards the end.
In summary, the operating and net profit margins reveal a mid-term decline followed by recovery, indicating cyclical operational profitability. Return on equity shows marked volatility, with an unusual spike suggesting extraordinary conditions near the end of the dataset. Meanwhile, return on assets remains relatively stable with mild fluctuations. These trends collectively reflect challenges and subsequent improvement in profitability and asset efficiency during the reported periods.
Return on Sales
Return on Investment
Operating Profit Margin
YUM! Brands Inc., operating profit margin calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Operating profit | ||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| Operating profit margin1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Operating Profit Margin, Competitors2 | ||||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
Operating profit margin = 100
× (Operating profitQ3 2016
+ Operating profitQ2 2016
+ Operating profitQ1 2016
+ Operating profitQ4 2015)
÷ (RevenuesQ3 2016
+ RevenuesQ2 2016
+ RevenuesQ1 2016
+ RevenuesQ4 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals varying trends in operating profit, revenues, and operating profit margin over the observed periods.
- Operating Profit
- Operating profit showed an overall fluctuating trend across the quarters with several peaks and troughs. Initial figures in 2011 start at moderate levels around 400 million US dollars and trend upward into 2012, reaching above 600 million in some quarters. However, the data includes a notable downturn in late 2014 with a negative operating profit of -43 million US dollars, indicating a severe loss for that quarter. Subsequently, profits recovered with values returning above 400 million in 2015 and fluctuating thereafter, occasionally nearing or surpassing previous highs in 2016.
- Revenues
- Revenues increased steadily from 2011 through the end of 2013, rising from approximately 2400 million US dollars to over 4100 million US dollars in some quarters, suggesting strong top-line growth. After 2013, revenue figures show seasonal fluctuations but maintain a general range between 2600 million and just under 4000 million US dollars per quarter through 2016, indicating stability but less apparent growth momentum compared to earlier periods.
- Operating Profit Margin
- The operating profit margin, expressed as a percentage, fluctuated notably over time. The margins were consistently above 14% for much of the early period, reaching peaks close to 16% to 17% during some quarters in 2012 and 2014. The margins then decreased to the range of approximately 10.5% to 11.7% around 2015, particularly notable alongside the dip in operating profit. By 2016, the margin rebounded to generally above 14%, at times exceeding 16%, indicating improved profitability relative to revenues.
Overall, the data indicates a business experiencing growth in revenue through 2013, but with volatility in operating profit and profitability margins. The sharp operating loss at the end of 2014 stands out as an exceptional event amidst otherwise positive or recovering performance levels. The later periods show a trend toward stabilization and moderate recovery in margin and profitability metrics, with revenues remaining relatively steady.
Net Profit Margin
YUM! Brands Inc., net profit margin calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net income, YUM! Brands, Inc. | ||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| Net profit margin1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| Net Profit Margin, Competitors2 | ||||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
Net profit margin = 100
× (Net income, YUM! Brands, Inc.Q3 2016
+ Net income, YUM! Brands, Inc.Q2 2016
+ Net income, YUM! Brands, Inc.Q1 2016
+ Net income, YUM! Brands, Inc.Q4 2015)
÷ (RevenuesQ3 2016
+ RevenuesQ2 2016
+ RevenuesQ1 2016
+ RevenuesQ4 2015)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
- Net Income Trend
- Net income shows notable fluctuations across the quarters without a consistent upward or downward trajectory. The highest net income observed is 622 million US dollars in the quarter ending September 3, 2016, representing a significant increase compared to previous periods. There is a pronounced dip in net income in the quarter ending December 27, 2014, with a negative value of -86 million US dollars, indicating a loss. Other quarters generally reflect positive net income, with periodic rises and falls.
- Revenues Trend
- Revenues generally demonstrate a seasonal pattern influenced by quarter-end peaks mostly in the fourth quarter of each year. Revenue figures tend to be higher in December quarters, peaking above 4 billion US dollars in multiple fourth quarters (e.g., December 31, 2011, December 29, 2012, December 28, 2013) and lower at the start of the year in March quarters. Overall, revenues fluctuate between approximately 2.5 billion and 4.2 billion US dollars, with a slight upward trend peaking in late 2013 and late 2014, followed by a degree of stability thereafter.
- Net Profit Margin Analysis
- Net profit margin exhibits a moderate variability, primarily ranging between 7% and 12%. The margin shows improvement over the observed periods with the highest margins around 12.62% in the quarter ending September 3, 2016. The lowest margins are observed around 7% in mid-2015 quarters. There is no indication of a declining profit margin trend; rather, margins appear resilient with fluctuations coinciding with revenue and net income variances.
- General Observations
- The financial data illustrates seasonal revenue peaks in the last quarter of the year, which correlate with higher net income in these periods, suggesting effective cost control or demand-driven profitability. The negative net income in late 2014 is an outlier that should prompt further investigation into potential one-time expenses or operational challenges during that timeframe. Despite revenue volatility, the net profit margin maintains stability, reflecting consistent profitability relative to revenues.
Return on Equity (ROE)
YUM! Brands Inc., ROE calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net income, YUM! Brands, Inc. | ||||||||||||||||||||||||||||||
| Shareholders’ equity (deficit), YUM! Brands, Inc. | ||||||||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| ROE1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| ROE, Competitors2 | ||||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
ROE = 100
× (Net income, YUM! Brands, Inc.Q3 2016
+ Net income, YUM! Brands, Inc.Q2 2016
+ Net income, YUM! Brands, Inc.Q1 2016
+ Net income, YUM! Brands, Inc.Q4 2015)
÷ Shareholders’ equity (deficit), YUM! Brands, Inc.
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals several notable trends in net income, shareholders' equity, and return on equity (ROE) over the analyzed periods.
- Net Income
-
Net income exhibited significant fluctuations throughout the periods. Initial quarters show a steady increase from 264 million to a peak of 471 million US dollars by September 2012. However, this was followed by a notable drop in the subsequent quarters, with net income declining to as low as 152 million and even turning negative to -86 million in December 2014. Following this dip, the net income recovered, attaining values above 300 million, and reached a high of 622 million US dollars by September 2016, indicating a strong rebound toward the end of the timeline.
- Shareholders’ Equity
-
Shareholders’ equity generally showed a gradual increase from 1,783 million US dollars in March 2011 to a peak of 2,505 million by September 2014. However, after this peak, equity diminished sharply, reaching negative values by June 2016 (-389 million) and further declining to -1,896 million by September 2016. This sharp decline and eventual negative equity could signal financial stress or significant liabilities exceeding assets.
- Return on Equity (ROE)
-
ROE values were initially quite high, ranging above 70% across many quarters between March 2012 and March 2015, with some oscillation but generally maintaining a strong level. During late 2014 and into 2015, ROE experienced substantial volatility, peaking at an extraordinary 847.44% in June 2016, likely influenced by the significantly reduced or negative shareholders’ equity base. Such elevated ROE values, especially those exceeding 100%, often reflect distortions due to small or negative equity figures rather than improved profitability performance.
Overall, the company demonstrated strong net income growth with interim volatility, experienced an initial increase in equity followed by severe erosion into negative territory, and displayed ROE figures impacted by the fluctuating equity base. The negative shareholders’ equity and extremely high ROE in later periods warrant further investigation into the company’s capital structure and underlying financial health.
Return on Assets (ROA)
YUM! Brands Inc., ROA calculation (quarterly data)
| Sep 3, 2016 | Jun 11, 2016 | Mar 19, 2016 | Dec 26, 2015 | Sep 5, 2015 | Jun 13, 2015 | Mar 21, 2015 | Dec 27, 2014 | Sep 6, 2014 | Jun 14, 2014 | Mar 22, 2014 | Dec 28, 2013 | Sep 7, 2013 | Jun 15, 2013 | Mar 23, 2013 | Dec 29, 2012 | Sep 8, 2012 | Jun 16, 2012 | Mar 24, 2012 | Dec 31, 2011 | Sep 3, 2011 | Jun 11, 2011 | Mar 19, 2011 | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||||||||||||||
| Net income, YUM! Brands, Inc. | ||||||||||||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||||||
| Profitability Ratio | ||||||||||||||||||||||||||||||
| ROA1 | ||||||||||||||||||||||||||||||
| Benchmarks | ||||||||||||||||||||||||||||||
| ROA, Competitors2 | ||||||||||||||||||||||||||||||
| Airbnb Inc. | ||||||||||||||||||||||||||||||
| Booking Holdings Inc. | ||||||||||||||||||||||||||||||
| Chipotle Mexican Grill Inc. | ||||||||||||||||||||||||||||||
| McDonald’s Corp. | ||||||||||||||||||||||||||||||
| Starbucks Corp. | ||||||||||||||||||||||||||||||
Based on: 10-Q (reporting date: 2016-09-03), 10-Q (reporting date: 2016-06-11), 10-Q (reporting date: 2016-03-19), 10-K (reporting date: 2015-12-26), 10-Q (reporting date: 2015-09-05), 10-Q (reporting date: 2015-06-13), 10-Q (reporting date: 2015-03-21), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-06), 10-Q (reporting date: 2014-06-14), 10-Q (reporting date: 2014-03-22), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-07), 10-Q (reporting date: 2013-06-15), 10-Q (reporting date: 2013-03-23), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-08), 10-Q (reporting date: 2012-06-16), 10-Q (reporting date: 2012-03-24), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-03), 10-Q (reporting date: 2011-06-11), 10-Q (reporting date: 2011-03-19).
1 Q3 2016 Calculation
ROA = 100
× (Net income, YUM! Brands, Inc.Q3 2016
+ Net income, YUM! Brands, Inc.Q2 2016
+ Net income, YUM! Brands, Inc.Q1 2016
+ Net income, YUM! Brands, Inc.Q4 2015)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations and overall trends in net income, total assets, and return on assets (ROA) for the periods analyzed.
- Net Income
- Net income demonstrates significant variability across the quarters. Initial values show a general upward trend from 264 million to a peak of 471 million by late 2011 and early 2012. However, this is followed by a decline and fluctuations, including a sharp negative figure (-86 million) observed at the end of 2014. Post this anomaly, net income recovers and exhibits growth, reaching a notable high of 622 million in September 2016. Despite the volatility, the latter periods suggest strengthening profitability.
- Total Assets
- Total assets maintain a relatively stable range between approximately 8,000 million and 9,300 million across most quarters, showing modest fluctuations without a clear trend of sustained growth or reduction during this timeframe. A significant increase to 10,432 million is recorded in the last period, indicating a material change in asset base, which could be attributed to expansion or acquisitions.
- Return on Assets (ROA)
- ROA data, though incomplete for early periods, shows a generally high return between 11% and 18%, indicating effective asset utilization for most quarters. Peaks above 16% occur intermittently, reflecting strong profitability relative to asset levels. A dip below 12% toward late 2013 and early 2014 occurs, coinciding with periods of net income decline. The ROA recovers in subsequent quarters, aligning with the rebound in net income, and remains robust above 15% into 2016.
In summary, the company experienced cycles of growth and contraction in net income and asset efficiency over the period, with strong recovery signs in the most recent data points. Total assets remained steady until the end of the period, when a sharp increase was recorded, potentially pointing to strategic corporate actions.