Kraft Foods Group Inc. (NASDAQ:KRFT)

The operating profit margin exhibited significant fluctuation between 2012 and 2014. Initial values indicate a substantial increase followed by a considerable decline. A detailed examination of the components reveals the underlying drivers of this trend.

Operating Profit Margin Trend

In 2012, the operating profit margin stood at 14.56%. This figure rose dramatically to 25.20% in 2013, representing a significant improvement in profitability. However, this positive trend reversed in 2014, with the operating profit margin decreasing to 10.38%.

Revenue Analysis

Net revenues remained relatively stable across the three-year period, fluctuating between US$18.205 billion and US$18.339 billion. The consistency in revenue suggests that changes in the operating profit margin were primarily driven by variations in operating income rather than top-line performance.

Operating Income Impact

Operating income increased substantially from US$2,670 million in 2012 to US$4,591 million in 2013, which directly contributed to the increase in the operating profit margin. Conversely, operating income decreased significantly to US$1,890 million in 2014, resulting in the observed decline in the operating profit margin. The magnitude of the operating income change in 2014 appears to be the primary factor influencing the overall trend.

The observed volatility in operating profit margin warrants further investigation into the factors affecting operating income. Potential areas of inquiry include cost of goods sold, selling, general, and administrative expenses, and any non-operating items impacting profitability.