Return on Equity (ROE)
since 2012
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Calculation
Kraft Foods Group Inc., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net earnings1 | ÷ | Equity1 | |
|---|---|---|---|---|---|---|---|
| Dec 27, 2014 | = | 100 | × | ÷ | |||
| Dec 28, 2013 | = | 100 | × | ÷ | |||
| Dec 29, 2012 | = | 100 | × | ÷ |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
1 US$ in millions
The period between 2012 and 2014 demonstrates significant fluctuations in return on equity. Net earnings and equity both experienced increases from 2012 to 2013, followed by declines in 2014. However, the changes in net earnings had a more pronounced effect on the ROE.
- Return on Equity (ROE)
- ROE increased from 45.97% in 2012 to 52.34% in 2013, indicating improved profitability relative to shareholder equity. This increase coincided with a substantial rise in net earnings. However, a significant decrease to 23.89% was observed in 2014. This decline occurred despite a decrease in equity, suggesting that the reduction in net earnings was the primary driver of the lower ROE.
- Net Earnings Trend
- Net earnings rose considerably from US$1,642 million in 2012 to US$2,715 million in 2013, representing a substantial improvement in profitability. A subsequent decrease to US$1,043 million in 2014 indicates a considerable reduction in earnings.
- Equity Trend
- Equity increased from US$3,572 million in 2012 to US$5,187 million in 2013, reflecting growth in shareholder investment or retained earnings. Equity then decreased to US$4,365 million in 2014, suggesting a potential return of capital to shareholders or other factors reducing equity.
The substantial volatility in ROE over this three-year period warrants further investigation. The significant drop in 2014, despite a decrease in equity, highlights the sensitivity of ROE to changes in net earnings. Understanding the factors contributing to the decline in net earnings in 2014 is crucial for assessing the company’s future performance and profitability.
Comparison to Competitors
Kraft Foods Group Inc., ROE, long-term trends, comparison to competitors
| Kraft Foods Group Inc. | lululemon athletica inc. | Nike Inc. | |
|---|---|---|---|
| Dec 27, 2014 | |||
| Dec 28, 2013 | |||
| Dec 29, 2012 |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
Comparison to Sector (Consumer Durables & Apparel)
Kraft Foods Group Inc., ROE, long-term trends, comparison to sector (consumer durables & apparel)
| Kraft Foods Group Inc. | Consumer Durables & Apparel | |
|---|---|---|
| Dec 27, 2014 | ||
| Dec 28, 2013 | ||
| Dec 29, 2012 |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).
Comparison to Industry (Consumer Discretionary)
Kraft Foods Group Inc., ROE, long-term trends, comparison to industry (consumer discretionary)
| Kraft Foods Group Inc. | Consumer Discretionary | |
|---|---|---|
| Dec 27, 2014 | ||
| Dec 28, 2013 | ||
| Dec 29, 2012 |
Based on: 10-K (reporting date: 2014-12-27), 10-K (reporting date: 2013-12-28), 10-K (reporting date: 2012-12-29).