Kraft Foods Group Inc. (NASDAQ:KRFT)

The period between 2012 and 2014 demonstrates significant fluctuation in return on assets. Net earnings and total assets exhibited varying performance over these three years, directly impacting the calculated ROA.

Return on Assets (ROA)

In 2012, the ROA stood at 7.04%. This figure increased substantially in 2013, reaching 11.73%, indicating improved profitability relative to the company’s assets. However, a marked decline occurred in 2014, with the ROA falling to 4.55%.

The increase in ROA from 2012 to 2013 correlates with a significant rise in net earnings, from US$1,642 million to US$2,715 million, while total assets remained relatively stable. The subsequent decrease in ROA in 2014 is attributable to a substantial reduction in net earnings, which decreased to US$1,043 million, despite a continued, albeit slight, decrease in total assets.

Net Earnings Trend

Net earnings experienced a considerable increase between 2012 and 2013, suggesting improved operational efficiency or increased revenue. The subsequent decrease in 2014 indicates a potential weakening of profitability, possibly due to increased costs, decreased sales, or other adverse factors.

Total Assets Trend

Total assets exhibited a minor decreasing trend over the three-year period, declining from US$23,329 million in 2012 to US$22,947 million in 2014. This decrease, while present, does not appear to be the primary driver of the ROA fluctuations, as the most significant changes are linked to net earnings.

The observed volatility in ROA suggests a sensitivity to changes in net earnings. Further investigation into the factors influencing net earnings in 2014 would be necessary to understand the reasons behind the decline in profitability and the corresponding decrease in ROA.