Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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Keurig Dr Pepper Inc. pages available for free this week:
- Income Statement
- Analysis of Short-term (Operating) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Operating Profit Margin since 2008
- Current Ratio since 2008
- Total Asset Turnover since 2008
- Price to Book Value (P/BV) since 2008
- Analysis of Debt
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Profitability Ratios (Summary)
Keurig Dr Pepper Inc., profitability ratios
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Return on Sales | |||||
| Gross profit margin | |||||
| Operating profit margin | |||||
| Net profit margin | |||||
| Return on Investment | |||||
| Return on equity (ROE) | |||||
| Return on assets (ROA) | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
- Gross profit margin
- The gross profit margin exhibited an overall upward trend from 52.16% in 2018 to a peak of 57.03% in 2019, followed by a slight decline to 55.83% in 2020 and a further marginal decrease to 55.01% in 2021. Despite the recent decreases, the margin remained above the 2018 level, indicating relatively stable profitability at the gross level.
- Operating profit margin
- The operating profit margin showed consistent improvement over the period. Starting at 16.62% in 2018, it increased significantly to 21.38% in 2019, held steady at 21.35% in 2020, and then rose further to 22.82% in 2021. This suggests enhanced operational efficiency and effective cost management during these years.
- Net profit margin
- The net profit margin demonstrated marked growth throughout the analyzed period. It increased from 7.87% in 2018 to 11.28% in 2019, remained nearly flat at 11.4% in 2020, and then surged to 16.92% in 2021. This upward trajectory implies improved overall profitability, potentially driven by stronger control of expenses, favorable tax impacts, or other income factors.
- Return on equity (ROE)
- Return on equity more than tripled over the four-year span, rising from a low 2.6% in 2018 to 8.59% in 2021. The increase was steady with a gradual improvement each year, reflecting more effective utilization of shareholders’ equity to generate profits.
- Return on assets (ROA)
- Return on assets followed a similar positive trend, increasing from 1.2% in 2018 to 4.24% in 2021. This growth highlights improving efficiency in asset utilization and suggests enhanced management of company resources in generating earnings.
Return on Sales
Return on Investment
Gross Profit Margin
Keurig Dr Pepper Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| 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-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
The analysis of the given financial data reveals several key trends in the company's performance over the four-year period ending December 31, 2021.
- Net Sales
- Net sales exhibited a significant upward trajectory, increasing steadily from $7,442 million in 2018 to $12,683 million in 2021. This represents a cumulative growth of approximately 70.5%. The consistent annual increase indicates strong revenue growth and possibly expanding market share or successful product strategies.
- Gross Profit
- Gross profit followed a similar upward pattern, with a notable rise from $3,882 million in 2018 to $6,977 million in 2021. This corresponds to an increase of about 79.7% over the four-year period, which slightly outpaces the growth rate in net sales. The growth in gross profit suggests improved efficiency or favorable product mix contributing to higher profitability at the gross level.
- Gross Profit Margin
- The gross profit margin exhibited some fluctuations but remained robust throughout the period. It increased from 52.16% in 2018 to a peak of 57.03% in 2019, before slightly declining to 55.83% in 2020 and 55.01% in 2021. Despite the slight decrease after 2019, the margin stayed above 55%, indicating sustained strong profitability relative to sales. The initial increase followed by a modest decline may reflect changes in cost structure, pricing strategies, or input costs.
Overall, the financial data points to accelerated growth in both net sales and gross profit, accompanied by a generally stable and healthy gross profit margin. These trends suggest that the company has been effective in increasing its revenues while maintaining efficient cost management over the examined period.
Operating Profit Margin
Keurig Dr Pepper Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ 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. | |||||
| Operating Profit Margin, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Operating Profit Margin, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Operating profit margin = 100 × Income from operations ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Income from Operations
- The income from operations has shown a consistent upward trend over the four-year period. Starting at 1,237 million USD in 2018, it increased significantly to 2,378 million USD in 2019. The growth continued in 2020 and 2021, reaching 2,480 million USD and 2,894 million USD respectively. This indicates steady operational expansion and improved profitability at the operational level.
- Net Sales
- Net sales have exhibited substantial growth from 7,442 million USD in 2018 to 12,683 million USD in 2021. The largest increase occurred between 2018 and 2019, with sales rising by approximately 3,678 million USD. Growth persisted in the subsequent years, albeit at a slower pace, highlighting continued revenue expansion over the period.
- Operating Profit Margin
- The operating profit margin improved progressively from 16.62% in 2018 to 22.82% in 2021. Notably, the margin jumped from 16.62% to 21.38% between 2018 and 2019, reflecting enhanced operational efficiency or better cost management. The margin remained relatively stable around 21% in 2020 before further increasing in 2021. The overall margin improvement aligns with the increases observed in income from operations and net sales, suggesting effective leveraging of revenue growth to improve profitability.
Net Profit Margin
Keurig Dr Pepper Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| 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. | |||||
| Net Profit Margin, Sector | |||||
| Food, Beverage & Tobacco | |||||
| Net Profit Margin, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
Net profit margin = 100 × Net income attributable to KDP ÷ Net sales
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to KDP
- The net income showed a consistent upward trend over the four-year period. Starting at 586 million USD in 2018, it more than doubled by 2019, reaching 1,254 million USD. This growth continued in subsequent years, rising to 1,325 million USD in 2020 and further accelerating to 2,146 million USD in 2021. The increase in net income reflects strong profitability improvements and effective income generation.
- Net Sales
- Net sales exhibited steady growth throughout the period. Beginning at 7,442 million USD in 2018, net sales increased significantly to 11,120 million USD in 2019. This upward trajectory continued, although at a slower pace, with sales reaching 11,618 million USD in 2020 and 12,683 million USD in 2021. The continuous increase in sales indicates steady demand and potentially successful sales strategies.
- Net Profit Margin
- The net profit margin progressively improved each year, suggesting enhanced operational efficiency and cost management. Starting at 7.87% in 2018, the margin rose to 11.28% in 2019 and remained relatively stable in 2020 at 11.4%. A notable increase occurred in 2021, when the net profit margin jumped significantly to 16.92%. This sharp rise indicates a higher conversion of sales into profit, reflecting both revenue growth and greater profitability.
Return on Equity (ROE)
Keurig Dr Pepper Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| 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. | |||||
| ROE, Sector | |||||
| Food, Beverage & Tobacco | |||||
| ROE, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
ROE = 100 × Net income attributable to KDP ÷ Stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income Attributable to KDP
- The net income shows a consistent upward trend over the four-year period. Starting from $586 million in 2018, it more than doubled by 2019 to $1,254 million. The growth continued in 2020 with a further increase to $1,325 million and saw a substantial jump in 2021 reaching $2,146 million.
- Stockholders’ Equity
- Stockholders’ equity exhibited a steady increase each year from 2018 to 2021. The value rose from $22,533 million in 2018 to $23,257 million in 2019, continuing upward to $23,829 million in 2020, and finally reaching $24,972 million in 2021. This trend indicates consistent growth in the company’s equity base over the period.
- Return on Equity (ROE)
- ROE demonstrates an improving trend over the analyzed years. Starting at a modest 2.6% in 2018, it more than doubled to 5.39% in 2019. A slight increase to 5.56% followed in 2020, and a more marked rise occurred in 2021, reaching 8.59%. This upward movement reflects an enhanced efficiency in generating profits from equity.
- Overall Analysis
- The data reveal a strong financial performance trajectory over the four-year period. The significant growth in net income, coupled with a steady rise in stockholders’ equity, suggests improved profitability alongside an expanding equity base. The increasing ROE further confirms that the company has been more effective in utilizing its equity to generate earnings, especially notable in the last recorded year. These trends collectively indicate strengthening financial health and operational efficiency.
Return on Assets (ROA)
Keurig Dr Pepper Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|
| Selected Financial Data (US$ 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. | |||||
| ROA, Sector | |||||
| Food, Beverage & Tobacco | |||||
| ROA, Industry | |||||
| Consumer Staples | |||||
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 2021 Calculation
ROA = 100 × Net income attributable to KDP ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
- Net Income
- Net income exhibited a consistent upward trend over the four-year period, rising significantly from 586 million US dollars in 2018 to 2,146 million US dollars in 2021. The most notable increase occurred between 2020 and 2021, where the net income increased by 821 million US dollars, representing a substantial growth rate relative to previous years.
- Total Assets
- Total assets showed a gradual increase each year, moving from 48,918 million US dollars in 2018 to 50,598 million US dollars in 2021. The asset base growth was relatively modest compared to the increase in net income, reflecting a stable asset management strategy during the observed period.
- Return on Assets (ROA)
- Return on assets improved steadily from 1.2% in 2018 to 4.24% in 2021, indicating enhanced efficiency in utilizing the company's assets to generate profits. The increase in ROA corresponds with the significant rise in net income, suggesting improved operational performance and profitability over time.