Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Statement of Comprehensive Income
- Balance Sheet: Assets
- Analysis of Liquidity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Debt to Equity since 2008
- Price to Earnings (P/E) since 2008
- Price to Book Value (P/BV) since 2008
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Profitability Ratios (Summary)
Keurig Dr Pepper Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The financial performance indicators demonstrate various trends across the observed quarterly periods. The analysis reveals patterns in profitability margins and returns that point to the overall financial health and efficiency of the company.
- Gross Profit Margin
- The gross profit margin showed a gradual decline over the ten quarters reviewed. Starting at 56.96% in the first quarter of 2020, it fell to 52.99% by the second quarter of 2022. This downtrend indicates increasing costs relative to revenues or possible pricing pressures, impacting the core profitability from operations before considering other expenses.
- Operating Profit Margin
- Contrasting the gross margin, the operating profit margin exhibited a generally positive trend. Initially at 20.89% in March 2020, it increased steadily, peaking at 25.04% in March 2022, before a slight decline to 23.04% by June 2022. This improvement suggests enhanced operational efficiency or effective management of operating expenses, partially offsetting the decline in gross profit margin.
- Net Profit Margin
- The net profit margin also showed marked improvement over the observed period. Beginning at 10.51%, the margin rose significantly, reaching a high of 18.71% in the first quarter of 2022, though it decreased slightly thereafter to 16.39%. This increase reflects not only operational gains but also potentially favorable factors in non-operating expenses, interest, and tax management.
- Return on Equity (ROE)
- There was a steady upward trajectory in the return on equity metric, starting from 5.21% and reaching 9.43% by the first quarter of 2022, before a minor reduction to 8.57%. This trend indicates enhanced profitability relative to shareholders' equity, signifying improved value creation for investors over time.
- Return on Assets (ROA)
- Return on assets mirrored the positive trend in profitability measures, increasing from 2.42% to 4.7% within the period, with a slight decrease to 4.23% afterward. It suggests more efficient use of asset base to generate earnings, signifying operational improvements and potentially better asset management.
In summary, the company faced a slow but consistent reduction in gross profitability, yet successfully improved its operating and net profit margins, alongside better returns on equity and assets. These dynamics highlight effective cost control and operational enhancements, which have mitigated the impact of declining gross margins and facilitated stronger overall profitability and return metrics.
Return on Sales
Return on Investment
Gross Profit Margin
Keurig Dr Pepper Inc., gross profit margin calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||
| Gross profit | ||||||||||||||
| Net sales | ||||||||||||||
| Profitability Ratio | ||||||||||||||
| Gross profit margin1 | ||||||||||||||
| Benchmarks | ||||||||||||||
| Gross Profit Margin, Competitors2 | ||||||||||||||
| Coca-Cola Co. | ||||||||||||||
| Mondelēz International Inc. | ||||||||||||||
| PepsiCo Inc. | ||||||||||||||
| Philip Morris International Inc. | ||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2022 Calculation
Gross profit margin = 100
× (Gross profitQ2 2022
+ Gross profitQ1 2022
+ Gross profitQ4 2021
+ Gross profitQ3 2021)
÷ (Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021
+ Net salesQ3 2021)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several key trends in terms of net sales, gross profit, and gross profit margin over the observed periods. Net sales have generally demonstrated a positive trajectory, increasing from 2,613 million US dollars at the end of the first quarter of 2020 to 3,554 million US dollars by the second quarter of 2022. Although there are minor fluctuations, the overall pattern indicates growth in sales revenue.
Gross profit follows a somewhat similar pattern, rising from 1,452 million US dollars in the first quarter of 2020 to a high of 1,835 million US dollars in the third quarter of 2021, before slightly declining and then stabilizing around 1,776 million US dollars in the second quarter of 2022. This suggests that while the company has been able to increase its gross profit alongside net sales, there have been periods of modest contraction.
The gross profit margin shows a gradual declining trend over time. Starting at 56.96% in the first quarter of 2020, it decreases to roughly 52.99% by the second quarter of 2022. Despite some small fluctuations, the steady erosion of the gross margin percentage signals increasing costs of goods sold relative to sales or downward pressure on pricing power.
- Net Sales
- Exhibited consistent growth overall, from 2,613 to 3,554 million US dollars over the analyzed period, reflecting expanding revenue streams.
- Gross Profit
- Increased in line with sales at first, peaking near the third quarter of 2021, but showing slight decreases thereafter, indicating potential margin pressures or cost increases.
- Gross Profit Margin
- Displayed a slow yet steady decline, moving from just under 57% down to just under 53%, which could highlight rising production costs or competitive pricing challenges impacting profitability.
In summary, the data indicates healthy revenue growth alongside challenges in maintaining gross margin levels. The declining gross profit margin warrants further investigation into cost structure and pricing strategy to sustain profitability while supporting sales expansion.
Operating Profit Margin
Keurig Dr Pepper Inc., operating profit margin calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||
| Income from operations | ||||||||||||||
| Net sales | ||||||||||||||
| Profitability Ratio | ||||||||||||||
| Operating profit margin1 | ||||||||||||||
| Benchmarks | ||||||||||||||
| Operating Profit Margin, Competitors2 | ||||||||||||||
| Coca-Cola Co. | ||||||||||||||
| Mondelēz International Inc. | ||||||||||||||
| PepsiCo Inc. | ||||||||||||||
| Philip Morris International Inc. | ||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2022 Calculation
Operating profit margin = 100
× (Income from operationsQ2 2022
+ Income from operationsQ1 2022
+ Income from operationsQ4 2021
+ Income from operationsQ3 2021)
÷ (Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021
+ Net salesQ3 2021)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The financial data over the specified periods indicates several notable trends in the company’s operational performance and sales figures.
- Income from Operations
- Income from operations shows an overall positive trend from the beginning of 2020 through mid-2021, generally increasing from 466 million US dollars in March 2020 to a peak of 795 million US dollars in September 2021. Thereafter, there is a slight fluctuation observed, with income decreasing to 572 million US dollars by June 2022 after reaching 966 million US dollars in March 2022. This pattern suggests some volatility in operational earnings in the latest quarters despite prior steady growth.
- Net Sales
- Net sales demonstrate consistent growth throughout the majority of the observed periods. Starting at 2,613 million US dollars in March 2020, net sales increase steadily, peaking at 3,554 million US dollars in June 2022. The growth in net sales appears stable, with only minor fluctuations, reflective of an expanding revenue base over the two and a half-year timeframe.
- Operating Profit Margin
- The operating profit margin generally trends upward from 20.89% in March 2020 to a high of 25.04% in March 2022, indicative of improving operational efficiency or better cost management relative to sales. However, a minor decline is observed in the subsequent quarter, decreasing to 23.04% by June 2022. Despite this drop, the margin remains higher than earlier periods, signifying sustained improvement over the long term.
In summary, the company exhibits positive growth in net sales and operational profitability over the periods analyzed. Although income from operations experiences some volatility in the most recent quarters, the overall profitability margins reflect strengthened operational performance. This combination of factors suggests an improving financial condition with some short-term fluctuations warranting monitoring.
Net Profit Margin
Keurig Dr Pepper Inc., net profit margin calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||
| Net income attributable to KDP | ||||||||||||||
| Net sales | ||||||||||||||
| Profitability Ratio | ||||||||||||||
| Net profit margin1 | ||||||||||||||
| Benchmarks | ||||||||||||||
| Net Profit Margin, Competitors2 | ||||||||||||||
| Coca-Cola Co. | ||||||||||||||
| Mondelēz International Inc. | ||||||||||||||
| PepsiCo Inc. | ||||||||||||||
| Philip Morris International Inc. | ||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2022 Calculation
Net profit margin = 100
× (Net income attributable to KDPQ2 2022
+ Net income attributable to KDPQ1 2022
+ Net income attributable to KDPQ4 2021
+ Net income attributable to KDPQ3 2021)
÷ (Net salesQ2 2022
+ Net salesQ1 2022
+ Net salesQ4 2021
+ Net salesQ3 2021)
= 100 × ( + + + )
÷ ( + + + )
=
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends in key performance indicators over the observed periods.
- Net Income Attributable to KDP
- The net income exhibits a general upward trajectory from the first quarter of 2020 through the end of 2021, starting at 156 million USD and reaching a peak of 843 million USD in the last quarter of 2021. This represents a significant increase over this timeframe. However, in 2022, net income shows volatility with a decline to 585 million USD in the first quarter and a more pronounced decrease to 218 million USD in the second quarter, indicating potential challenges or seasonal effects impacting profitability.
- Net Sales
- Net sales demonstrate a steady increase over the examined quarters, moving from 2.613 billion USD in the first quarter of 2020 to 3.554 billion USD by the second quarter of 2022. This upward trend suggests consistent growth in revenue generation. Quarterly sales fluctuations are relatively modest, and the overall pattern indicates expanding market demand or successful sales strategies.
- Net Profit Margin
- Profit margin percentages show a continuous improvement from 10.51% in March 2020 to a peak of 18.71% in the first quarter of 2022. This upward trend implies enhanced operational efficiency or favorable cost management. Nevertheless, the margin dips to 16.39% in the subsequent quarter of 2022, which may reflect rising costs, pricing pressures, or other operational challenges impairing profitability despite increased sales.
In summary, the data reflects robust revenue growth and improving profitability margins through 2021 and early 2022, coupled with a substantial rise in net income up until the end of 2021. The subsequent fluctuations in net income and margin during 2022 suggest emerging headwinds or cyclical factors influencing financial performance. Continued monitoring will be essential to determine whether these changes represent a temporary deviation or a more sustained shift in financial health.
Return on Equity (ROE)
Keurig Dr Pepper Inc., ROE calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||
| Net income attributable to KDP | ||||||||||||||
| Stockholders’ equity | ||||||||||||||
| Profitability Ratio | ||||||||||||||
| ROE1 | ||||||||||||||
| Benchmarks | ||||||||||||||
| ROE, Competitors2 | ||||||||||||||
| Coca-Cola Co. | ||||||||||||||
| Mondelēz International Inc. | ||||||||||||||
| PepsiCo Inc. | ||||||||||||||
| Philip Morris International Inc. | ||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2022 Calculation
ROE = 100
× (Net income attributable to KDPQ2 2022
+ Net income attributable to KDPQ1 2022
+ Net income attributable to KDPQ4 2021
+ Net income attributable to KDPQ3 2021)
÷ Stockholders’ equity
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The net income attributable to the company exhibited variability over the observed periods. Initially, it showed an increasing trend from March 2020 through December 2020, rising from 156 million US dollars to 428 million US dollars. The income peaked intermittently in December 2021 at 843 million US dollars, followed by a notable decrease in subsequent quarters, reaching 218 million US dollars by June 2022.
The stockholders’ equity demonstrated a gradual and steady increase throughout the analyzed timeframe. Starting at 22,640 million US dollars in March 2020, it progressively grew to reach a high of 25,511 million US dollars in March 2022, before slightly declining to 25,391 million US dollars in June 2022. This trend suggests consistent accumulation of equity over time, with no significant volatility.
The return on equity (ROE) percentages generally followed an upward trajectory with some fluctuations. Beginning at 5.21% in March 2020, ROE decreased slightly mid-year 2020 but then steadily increased, peaking at 9.43% in March 2022. A marginal decline to 8.57% was observed by June 2022. This pattern indicates an improvement in the company’s ability to generate profit from its equity base over the majority of the periods analyzed, despite some recent moderation.
- Net Income Analysis
- Substantial growth occurred in net income through 2021, with a peak in late 2021 and early 2022, followed by a significant fall in the most recent quarter.
- Stockholders’ Equity Analysis
- Consistent growth in equity suggests stable capital retention and shareholder value accumulation over the period.
- Return on Equity (ROE) Analysis
- Improvement in ROE reflects enhanced profitability relative to equity, although the slight recent decline may warrant monitoring for future performance trends.
Return on Assets (ROA)
Keurig Dr Pepper Inc., ROA calculation (quarterly data)
| Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||
| Net income attributable to KDP | ||||||||||||||
| Total assets | ||||||||||||||
| Profitability Ratio | ||||||||||||||
| ROA1 | ||||||||||||||
| Benchmarks | ||||||||||||||
| ROA, Competitors2 | ||||||||||||||
| Coca-Cola Co. | ||||||||||||||
| Mondelēz International Inc. | ||||||||||||||
| PepsiCo Inc. | ||||||||||||||
| Philip Morris International Inc. | ||||||||||||||
Based on: 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
1 Q2 2022 Calculation
ROA = 100
× (Net income attributable to KDPQ2 2022
+ Net income attributable to KDPQ1 2022
+ Net income attributable to KDPQ4 2021
+ Net income attributable to KDPQ3 2021)
÷ Total assets
= 100 × ( + + + )
÷ =
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends in the company's performance over the reported periods.
- Net Income
- The net income attributable to the company exhibits variability across the quarters. Initially, there is a rising trend from $156 million at the end of Q1 2020 to $443 million by Q3 2020. This increase moderates slightly in Q4 2020, settling at $428 million. The first quarter of 2021 shows a dip to $325 million, followed by a recovery and steady increase through the end of 2021, with net income peaking at $843 million in Q4 2021. However, the first half of 2022 showcases volatility; net income falls to $585 million in Q1 and further declines to $218 million by Q2 2022. This pattern indicates strong profitability towards the end of 2021, but a notable reduction in the subsequent quarters of 2022.
- Total Assets
- Total assets demonstrate a consistent upward trajectory over the entire period. Beginning at approximately $48.8 billion in Q1 2020, assets grow steadily each quarter, reaching $51.4 billion by mid-2022. The incremental growth suggests ongoing investments or asset acquisitions, reflecting the company's expansion or capital allocation strategies.
- Return on Assets (ROA)
- The ROA percentage follows an upward trend throughout the period. Starting at around 2.42% in Q1 2020, it experiences minor fluctuations initially but then consistently rises from early 2021 onwards, peaking at 4.7% in Q1 2022. The slight decrease to 4.23% in Q2 2022 may correlate with the decrease in net income observed in the same quarter. The overall increase in ROA indicates improved efficiency in utilizing assets to generate earnings up to early 2022.
In summary, the data reflects strong income growth through 2021, supported by steady asset growth and improving returns on assets. However, the first half of 2022 shows signs of decreased profitability and ROA after reaching peak levels, suggesting potential challenges or changes impacting earnings in that period. The sustained growth in total assets, despite the income volatility, points toward ongoing investment or operational expansion efforts.