Celgene Corp. (NASDAQ:CELG)

Return on Assets (ROA)

The Return on Assets demonstrates a fluctuating yet overall improving trend across the observed periods. Starting at 11.53% in 2014, the ratio experienced a notable decline to 5.92% in 2015, followed by a moderate recovery to 7.12% in 2016. From 2016 onwards, ROA showed continuous improvement, reaching 9.75% in 2017 and further increasing to 11.4% in 2018, nearly returning to the initial level observed in 2014.

Financial Leverage

Financial Leverage exhibited a rising pattern over the years, rising from a ratio of 2.66 in 2014 to 4.57 in 2015, indicating increased use of debt or liabilities relative to equity. After a slight decrease to 4.26 in 2016, Financial Leverage rose marginally to 4.36 in 2017 and then marked a substantial increase to 5.76 in 2018. This suggests an increasing reliance on leverage financing toward the end of the period.

Return on Equity (ROE)

Return on Equity showed considerable volatility but an overall significant upward trajectory. Initially, the ROE decreased from 30.65% in 2014 to 27.07% in 2015, followed by a recovery to 30.29% in 2016. The subsequent years revealed strong growth with ROE reaching 42.48% in 2017 and surging to 65.67% in 2018. This sharp increase corresponds with the heightened Financial Leverage, suggesting amplified returns to equity holders potentially driven by increased leverage.

The financial data reveals several notable trends in the company's profitability, asset utilization, leverage, and overall return to shareholders over the five-year period.

Net Profit Margin

The net profit margin experienced a decline from 26.44% in 2014 to 17.49% in 2015, indicating reduced profitability during that year. Following this dip, the margin stabilized and gradually improved, rising to 26.51% by 2018, effectively returning to and slightly surpassing the initial level observed in 2014. This suggests increasing operational efficiency or improved cost management in the latter years.

Asset Turnover

Asset turnover started at 0.44 in 2014 and fell to 0.34 in 2015, reflecting a decrease in the efficiency of asset use to generate sales or revenue. The ratio recovered moderately in the following years, reaching 0.43 in both 2017 and 2018, almost matching the initial figure. This indicates a positive correction in asset utilization after the initial drop.

Financial Leverage

Financial leverage increased significantly from 2.66 in 2014 to 4.57 in 2015, remaining elevated in subsequent years and peaking at 5.76 in 2018. This upward trend reveals an increasing reliance on debt or other liabilities to finance assets, which could amplify returns but also entails higher financial risk.

Return on Equity (ROE)

ROE displayed fluctuation, initially decreasing from 30.65% in 2014 to 27.07% in 2015, then recovering to 30.29% in 2016. A marked improvement is observed thereafter, with ROE climbing sharply to 42.48% in 2017 and reaching an exceptionally high 65.67% in 2018. This suggests a strong enhancement in shareholder value generation, possibly driven by increased net profits and leverage.

Overall, the company experienced a temporary setback in profitability and asset efficiency in 2015 but demonstrated a recovery and growth in these areas subsequently. The steady rise in financial leverage indicates a strategic shift towards more debt financing, which appears to have contributed to a significant increase in return on equity, especially by 2018. The combined effect shows improved profitability and higher returns to shareholders, albeit with elevated financial risk due to increased leverage.

Tax Burden

The tax burden ratio experienced fluctuations over the period. It started at 0.86 in 2014, declined to its lowest point at 0.68 in 2017, then rose again to 0.84 by 2018. This suggests variability in the company's effective tax rate or tax-related expenses during these years.

Interest Burden

The interest burden showed a general decreasing trend from 0.93 in 2014 to 0.83 in 2016, indicating a reduction in interest expenses relative to earnings before interest and taxes. However, it slightly increased in subsequent years to 0.89 in 2017 and settled at 0.87 in 2018, suggesting some variability but overall maintained a lower level compared to the start of the period.

EBIT Margin

The EBIT margin demonstrated an initial decline from 33.1% in 2014 to around 25.5% in 2015 and 2016, indicating reduced operating profitability during these years. This was followed by a strong recovery and increase to 37.28% in 2017, maintaining a similar level of 36.51% in 2018, reflecting improved operating efficiency and profitability towards the end of the period.

Asset Turnover

Asset turnover ratio decreased sharply from 0.44 in 2014 to 0.34 in 2015, indicating a reduction in asset efficiency. It partially recovered to 0.40 in 2016, and then stabilized around 0.43 in 2017 and 2018. This suggests the company was able to improve its utilization of assets but did not surpass the initial 2014 level by the end of the period.

Financial Leverage

Financial leverage showed a significant upward trend, increasing from 2.66 in 2014 to 5.76 in 2018. The leverage ratio peaked in 2015 at 4.57 and experienced minor fluctuations before reaching the highest value at the end of the period. This indicates an increased reliance on debt or other liabilities to finance assets over the years.

Return on Equity (ROE)

ROE experienced volatility but showed a strong upward trend overall. Starting at 30.65% in 2014, it dipped to 27.07% in 2015, then improved steadily to 30.29% in 2016 and surged markedly to 42.48% in 2017, reaching a peak of 65.67% in 2018. This significant increase is likely influenced by the growing financial leverage combined with improvements in operating income and tax burden adjustments, resulting in enhanced shareholder returns.

The financial performance indicators over the period from 2014 to 2018 display noteworthy trends in profitability and efficiency.

Net Profit Margin (%)

The net profit margin exhibited a decline from 26.44% in 2014 to a low of 17.49% in 2015, indicating a reduction in profitability relative to revenues. However, the margin showed a recovery trend thereafter, increasing to 26.51% by 2018, nearly returning to the initial 2014 level. This suggests improved cost management or revenue quality in the latter years.

Asset Turnover (ratio)

The asset turnover ratio decreased from 0.44 in 2014 to 0.34 in 2015, reflecting a reduction in sales generated per unit of assets. Following this dip, the ratio gradually improved to 0.43 by 2017 and remained stable into 2018. This trend indicates a temporary decline in asset utilization efficiency, followed by a recovery.

Return on Assets (ROA) (%)

ROA decreased sharply from 11.53% in 2014 to 5.92% in 2015, signaling a drop in overall profitability relative to total assets. Subsequently, there was a steady improvement, reaching 11.4% in 2018, which nearly matches the 2014 benchmark. The trajectory aligns with the observed patterns in net profit margin and asset turnover, confirming a rebound in effective asset use and profit generation.

Overall, the data reveals a significant performance dip in 2015 across all measured metrics, followed by a consistent recovery in the ensuing years, culminating in financial efficiency and profitability indicators that approach or exceed initial levels by 2018.

The analysis of the financial ratios over the five-year period reveals several notable trends and fluctuations. The tax burden ratio exhibits variability, with a high of 0.86 at the beginning and near the end of the period (2014 and 2018), but a marked dip to 0.68 in 2017, indicating a temporary reduction in tax expense relative to pre-tax earnings during that year.

The interest burden ratio shows a gradual decline from 0.93 in 2014 to a low of 0.83 in 2016, followed by a slight recovery to around 0.87 by 2018. This trend suggests a moderate increase in interest expenses relative to earnings before interest and taxes during 2015-2016, with some improvement thereafter.

The EBIT margin percentage demonstrates an overall upward trend with some volatility. After a decrease to approximately 25.5% in 2015 and 2016 from 33.1% in 2014, there is a significant increase to 37.28% in 2017. This elevated level is maintained near 36.5% in 2018, reflecting improved operational profitability in the latter years.

Asset turnover remains relatively stable but at a somewhat low level throughout the period. It decreases initially from 0.44 in 2014 to 0.34 in 2015, then recovers gradually to 0.43 by 2017 and remains steady through 2018. This suggests consistent but moderate efficiency in generating sales from assets over time.

The return on assets (ROA) percentage generally follows an upward trajectory, starting from 11.53% in 2014, declining sharply to 5.92% in 2015, then incrementally improving each subsequent year to reach 11.4% by 2018. This pattern indicates initial challenges in asset profitability, followed by a recovery and improved overall return on asset utilization.

Tax Burden

Variable with a notable dip in 2017; lowest tax expense relative to earnings in that year.

Interest Burden

Gradual decline in interest coverage during 2015-2016, slight recovery afterward.

EBIT Margin

Decline in 2015 and 2016 followed by significant improvement and sustained higher margins in 2017-2018.

Asset Turnover

Moderate fluctuation; overall stable around mid-0.4 range, indicating steady asset efficiency.

Return on Assets (ROA)

Sharp decrease in 2015, then continuous growth to nearly original levels by 2018, showing improved asset profitability.

Tax Burden

The tax burden ratio exhibits fluctuations over the five-year period. It starts at 0.86 in 2014, declines to a low of 0.68 in 2017, then rebounds to 0.84 by the end of 2018. This pattern indicates variations in the effective tax rate impacting the company's profitability before taxes.

Interest Burden

The interest burden shows a declining trend from 0.93 in 2014 to 0.83 in 2016, suggesting an increase in interest expenses relative to earnings before interest and taxes during this timeframe. However, there is a slight recovery in 2017 and 2018, with the ratio rising to 0.89 and 0.87 respectively, indicating somewhat improved interest cost management or reduced debt levels in the latter years.

EBIT Margin

The EBIT margin decreases notably from 33.1% in 2014 to around 25.5% in 2015 and 2016, showing reduced operating profitability. From 2017 onwards, there is a significant improvement, with EBIT margin increasing sharply to 37.28% in 2017 and maintaining a high level of 36.51% in 2018. This suggests enhanced operational efficiency or higher operating income relative to revenue in recent years.

Net Profit Margin

The net profit margin demonstrates a downward movement from 26.44% in 2014 to a low point of 17.49% in 2015, remaining around that level in 2016. Subsequently, it improves steadily to 22.66% in 2017 and further to 26.51% in 2018, almost reaching the starting level. This trend reflects an initial contraction followed by a recovery in the company's bottom-line profitability, possibly linked to improved operational performance and tax/interest expense management seen in the prior ratios.