Kraft Foods Group Inc. (NASDAQ:KRFT)

Asset Turnover Ratios

The reported total asset turnover remained steady at 0.79 across the three consecutive years, indicating consistent efficiency in utilizing assets to generate revenue. The adjusted total asset turnover closely mirrored this trend, showing a slight dip to 0.78 in 2013 but returning to 0.79 in 2014, suggesting stable operational performance with minimal fluctuation in asset utilization.

Current Ratios

The reported current ratio exhibited varied movement, rising from 1.34 in 2012 to 1.44 in 2013, followed by a notable decline to 1.00 in 2014. The adjusted current ratio similarly increased from 1.23 to 1.34 between 2012 and 2013 but fell more sharply to 0.93 in 2014. This trend suggests a deterioration in short-term liquidity and the company's ability to cover current liabilities in the latest year.

Debt to Equity Ratios

Both reported and adjusted debt to equity ratios decreased significantly from 2012 to 2013, falling from 2.79 to 1.92 (reported) and from 3.08 to 1.89 (adjusted). However, in 2014, these ratios increased again to 2.30 and 2.43, respectively, indicating a partial reversal and greater reliance on debt financing compared to equity during the last period.

Debt to Capital Ratios

Debt to capital ratios, both reported and adjusted, demonstrated a similar pattern of decline from 2012 (0.74 reported, 0.76 adjusted) to 2013 (0.66 reported, 0.65 adjusted), followed by an increase in 2014 (0.70 reported, 0.71 adjusted). These movements reflect changes in the capital structure, where debt's proportion within total capital decreased initially but rose again in the subsequent year.

Financial Leverage

Reported financial leverage showed a notable reduction from 6.53 in 2012 to 4.46 in 2013, indicating decreased use of debt relative to equity or assets, but then increased to 5.26 in 2014. Adjusted financial leverage shared a similar trajectory, dropping from 6.94 to 4.22 and then rising slightly to 5.35. These figures suggest fluctuations in the company's risk profile related to financing decisions over the analyzed period.

Net Profit Margin

The reported net profit margin increased markedly from 8.95% in 2012 to 14.9% in 2013, demonstrating improved profitability, but declined sharply to 5.73% in 2014. Adjusted net profit margins showed an even more pronounced increase to 18.43% in 2013 before declining to 3.3% in 2014. This indicates that while the company achieved strong profit efficiency in 2013, profitability decreased significantly in 2014.

Return on Equity (ROE)

Reported ROE rose from 45.97% in 2012 to 52.34% in 2013, consistent with improved profitability, but dropped to 23.89% in 2014. Adjusted ROE followed a similar path, climbing to 61.04% in 2013 before decreasing to 13.99% in 2014. This trend highlights substantial gain in shareholder returns in 2013, followed by a marked decline in 2014, reflective of reduced profitability and possibly increased equity.

Return on Assets (ROA)

The reported ROA increased from 7.04% in 2012 to 11.73% in 2013, then fell to 4.55% in 2014. Adjusted ROA also rose in 2013 to 14.45% before decreasing notably to 2.61% in 2014. This pattern indicates more effective asset utilization for income generation in 2013, with a significant drop in asset efficiency in the following year.

Overall Insights

Across the three years, the company exhibited stable asset turnover but fluctuating liquidity and leverage metrics. The financial leverage and debt ratios decreased significantly in 2013, indicating a shift towards a stronger balance sheet with possibly less risk, but increased again in 2014, suggesting a return to higher leverage. Profitability measures peaked in 2013, showing strong performance that was not sustained in 2014, when margins, ROE, and ROA all declined markedly. The decline in current ratios and profitability in 2014 points to emerging financial pressures, reducing both liquidity and returns on investment. These trends collectively suggest a period of peak operational and financial performance in 2013, followed by weakening indicators in 2014.

Net Revenues

The net revenues remained relatively stable over the three-year period, with a slight decrease from $18,339 million in 2012 to $18,205 million in 2014. This suggests a consistent sales performance with minimal fluctuations.

Total Assets

Total assets showed a gradual decline from $23,329 million in 2012 to $22,947 million in 2014. This downward trend indicates a modest reduction in the company’s asset base over the period.

Reported Total Asset Turnover

The reported total asset turnover ratio remained constant at 0.79 throughout the three years, reflecting stable efficiency in using assets to generate revenues.

Adjusted Total Assets

Adjusted total assets also exhibited a slight decline, moving from $23,319 million in 2012 to $22,953 million in 2014. This aligns closely with the trend observed in total assets.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio remained stable at around 0.79 in 2012 and 2014, with a marginal dip to 0.78 in 2013. Overall, this metric indicates consistent asset utilization efficiency over the analyzed periods.

Current Assets

The current assets demonstrate a slight increase from 4823 million US dollars in 2012 to 4908 million US dollars in 2013, followed by a small decline to 4791 million US dollars in 2014. Overall, the current assets remained relatively stable over the three years, with minor fluctuations.

Current Liabilities

Current liabilities decreased from 3606 million US dollars in 2012 to 3410 million US dollars in 2013, indicating improved short-term obligations management. However, a significant increase was observed in 2014, rising sharply to 4773 million US dollars, which may represent a potential liquidity concern.

Reported Current Ratio

The reported current ratio improved from 1.34 in 2012 to 1.44 in 2013, reflecting stronger liquidity and a better capacity to cover short-term liabilities with current assets. Nonetheless, there was a marked decline to 1.00 in 2014, suggesting a decrease in liquidity and a potential challenge in meeting short-term obligations.

Adjusted Current Assets

Adjusted current assets show a slight downward trend, moving from 4431 million US dollars in 2012 to 4428 million US dollars in 2014, with a peak at 4574 million US dollars in 2013. This indicates that after adjustments, liquid assets have remained fairly consistent, though with a marginal decline by the end of the period.

Adjusted Current Ratio

Similar to the reported current ratio, the adjusted current ratio improved from 1.23 in 2012 to 1.34 in 2013, reflecting improved adjusted liquidity. Nonetheless, it declined significantly to 0.93 in 2014, dropping below the benchmark of 1.0, which generally signals insufficient adjusted current assets to cover adjusted current liabilities, thus possibly indicating liquidity risk.

The financial data over the three-year period reveals several significant trends related to the company's debt and equity structure.

Total Debt

The total debt levels remained relatively stable, with a slight increase observed from 9,971 million US dollars in 2012 to 10,032 million US dollars in 2014. This indicates a consistent leverage level without aggressive borrowing growth.

Equity

Equity showed notable fluctuations; starting at 3,572 million US dollars in 2012, it increased sharply to 5,187 million US dollars in 2013, followed by a decline to 4,365 million US dollars in 2014. This volatility suggests significant changes in the company’s retained earnings or capital structure during these years.

Reported Debt to Equity Ratio

The reported debt to equity ratio improved significantly from 2.79 in 2012 to 1.92 in 2013, implying a stronger equity base relative to debt that year. However, it increased again to 2.3 in 2014, indicating a reversal toward higher leverage, though still lower than the 2012 level.

Adjusted Total Debt

Adjusted total debt remained nearly flat at approximately 10,400 million US dollars in 2013 and 2014, slightly above the 10,353 million US dollars reported in 2012. This stability confirms a consistent debt position after accounting for any adjustments.

Adjusted Equity

Adjusted equity mirrored the pattern of reported equity, rising sharply from 3,359 million US dollars in 2012 to 5,500 million US dollars in 2013 before falling back to 4,288 million US dollars in 2014. This adjusted figure highlights the underlying changes impacting equity availability.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio exhibited a notable improvement from 3.08 in 2012 to 1.89 in 2013, reflecting a substantial increase in relative equity strength. Nevertheless, the ratio rose again to 2.43 in 2014, indicating increased leverage but remaining significantly lower than the initial year.

Overall, the data shows a peak in equity in 2013 that contributed to lower leverage ratios, followed by a decline in equity in 2014 leading to increased leverage ratios. Despite the variations in equity, total and adjusted debt levels remained largely stable, suggesting that changes in leverage ratios were primarily equity-driven rather than resulting from changes in debt.

Total Debt and Capital

Total debt showed a slight upward trend over the three years, increasing from 9,971 million USD at the end of 2012 to 10,032 million USD by the end of 2014. Total capital rose notably from 13,543 million USD in 2012 to a peak of 15,167 million USD in 2013, before declining to 14,397 million USD in 2014.

Debt to Capital Ratios

The reported debt to capital ratio decreased significantly from 0.74 in 2012 to 0.66 in 2013, indicating a reduction in leverage relative to capital. However, this ratio increased again to 0.70 in 2014, suggesting a partial reversal of the previous year's deleveraging.

Adjusted Debt and Capital

Adjusted total debt experienced a modest increase from 10,353 million USD in 2012 to 10,401 million USD in 2014, with a slight peak of 10,402 million USD in 2013. Adjusted total capital followed a similar pattern to the reported capital, rising from 13,712 million USD in 2012 to 15,902 million USD in 2013 and then decreasing to 14,689 million USD in 2014.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio mirrored the trend observed in the reported ratio, moving from 0.76 in 2012 down to 0.65 in 2013, followed by an increase to 0.71 in 2014. This pattern suggests a temporary improvement in leverage in 2013, which was not sustained into 2014.

Overall Insights

The data reveal a moderate increase in debt levels over the three years with capital fluctuating more markedly. The leverage ratios indicate an improvement in the company's capital structure in 2013, characterized by a lower proportion of debt relative to capital. This improvement was, however, partly reversed in 2014, as both reported and adjusted debt to capital ratios increased, reflecting a rise in leverage. The adjusted figures consistently present slightly higher debt levels and higher leverage ratios compared to the reported values, suggesting additional liabilities factored into adjusted calculations.

Total Assets

The total assets showed a slight decline over the analyzed period, decreasing from 23,329 million US dollars in 2012 to 22,947 million US dollars in 2014. This decline was relatively modest, reflecting a subtle contraction of the asset base.

Equity

Equity experienced notable fluctuations. It increased significantly from 3,572 million US dollars in 2012 to 5,187 million US dollars in 2013, suggesting improved retained earnings or capital injections during that year. However, in 2014, equity declined to 4,365 million US dollars, indicating some erosion of shareholders' equity possibly due to losses or distributions.

Reported Financial Leverage

The reported financial leverage ratio decreased sharply from 6.53 in 2012 to 4.46 in 2013, indicating a substantial reduction in reliance on debt relative to equity that year. In 2014, the ratio increased to 5.26, showing a partial reversal towards higher leverage but still remaining below the 2012 level.

Adjusted Total Assets

Adjusted total assets followed a similar pattern to total assets, with a minor decline from 23,319 million US dollars in 2012 to 22,953 million US dollars in 2014, indicating consistent asset valuation adjustments.

Adjusted Equity

The adjusted equity mirrored reported equity trends, rising significantly from 3,359 million US dollars in 2012 to 5,500 million US dollars in 2013, before falling to 4,288 million US dollars in 2014. The magnitude of change here was slightly more pronounced than in reported equity, suggesting adjustments in valuation or accounting treatment impacting equity figures.

Adjusted Financial Leverage

Adjusted financial leverage declined markedly from 6.94 in 2012 to 4.22 in 2013, reflecting a significant deleveraging. The ratio rose again to 5.35 in 2014, indicating renewed leverage but at a moderated level compared to 2012. The adjusted leverage ratios are generally higher than reported metrics, highlighting more conservative assessments of financial risk.

Net Earnings

Net earnings exhibited a notable increase from 1,642 million US dollars in 2012 to 2,715 million US dollars in 2013, representing a substantial growth. However, in 2014, net earnings experienced a significant decline to 1,043 million US dollars, which is considerably lower than the previous two years.

Net Revenues

Net revenues remained relatively stable over the three-year period, with a slight decrease from 18,339 million US dollars in 2012 to 18,218 million US dollars in 2013, and a further marginal decline to 18,205 million US dollars in 2014. This indicates a general trend of plateauing sales or revenue generation during this timeframe.

Reported Net Profit Margin

The reported net profit margin increased significantly in 2013, reaching 14.9%, up from 8.95% in 2012. Nevertheless, in 2014, the margin decreased sharply to 5.73%, which is notably below the levels of the previous years and suggests a reduction in profitability relative to revenues.

Adjusted Net Earnings

Adjusted net earnings followed a trend similar to net earnings, increasing markedly from 2,063 million US dollars in 2012 to 3,357 million US dollars in 2013, followed by a steep decline to 600 million US dollars in 2014. This decline is more pronounced than that observed in the reported net earnings, signaling the possibility of exceptional or non-recurring items influencing the adjusted figures.

Adjusted Net Profit Margin

Adjusted net profit margin rose from 11.25% in 2012 to 18.43% in 2013, indicating a period of improved operational efficiency or favorable adjustments in that year. However, it dropped significantly to 3.3% in 2014, the lowest across the observed periods, highlighting increased pressure on profitability after adjustments.

Net Earnings

Net earnings demonstrated significant volatility over the observed periods. There was a notable increase from 1,642 million US dollars in 2012 to 2,715 million US dollars in 2013, followed by a sharp decline to 1,043 million US dollars in 2014. This suggests considerable instability in profitability during the last period.

Equity

Equity showed a strong upward trend initially, rising from 3,572 million US dollars in 2012 to 5,187 million US dollars in 2013. However, it decreased to 4,365 million US dollars in 2014, indicating a possible contraction in the company’s net assets or shareholder value in the most recent year.

Reported Return on Equity (ROE)

Reported ROE experienced an increase from 45.97% in 2012 to 52.34% in 2013, demonstrating improved profitability relative to equity. Nonetheless, it declined significantly to 23.89% in 2014, reflecting reduced efficiency in generating returns from shareholder equity during that period.

Adjusted Net Earnings

The adjusted net earnings followed a trend similar to net earnings but with larger fluctuations. There was a robust increase from 2,063 million US dollars in 2012 to 3,357 million US dollars in 2013, after which a pronounced drop to 600 million US dollars occurred in 2014. This suggests that non-recurring or special items impacted earnings profoundly in 2014.

Adjusted Equity

Adjusted equity increased from 3,359 million US dollars in 2012 to 5,500 million US dollars in 2013, then decreased to 4,288 million US dollars in 2014. This pattern closely mirrors that of reported equity, potentially indicating underlying adjustments related to asset valuations or accounting changes.

Adjusted ROE

Adjusted ROE remained relatively stable and high at around 61% for 2012 and 2013, indicating strong adjusted profitability for these years. However, it underwent a steep decline to 13.99% in 2014, highlighting a substantial drop in return on equity after adjusting for specified items, consistent with the large reduction in adjusted net earnings.

Net Earnings

Net earnings increased significantly from 1642 million USD in 2012 to 2715 million USD in 2013, representing a substantial growth. However, in 2014, net earnings sharply declined to 1043 million USD, indicating a considerable reduction in profitability compared to the previous year.

Total Assets

Total assets showed a slight downward trend over the three years, decreasing from 23329 million USD in 2012 to 22947 million USD in 2014. This decline was gradual and relatively modest, suggesting stable asset levels with minor reductions.

Reported Return on Assets (ROA)

The reported ROA improved significantly from 7.04% in 2012 to 11.73% in 2013, reflecting enhanced efficiency in generating earnings from assets. Nevertheless, in 2014, the ROA decreased markedly to 4.55%, indicating a decline in asset profitability in that year.

Adjusted Net Earnings

Adjusted net earnings mirrored the trend in reported net earnings but exhibited higher values. The figure rose from 2063 million USD in 2012 to 3357 million USD in 2013, marking strong performance. However, a substantial drop occurred in 2014 to 600 million USD, pointing to significant adjustments that further highlighted the decline in earnings for that year.

Adjusted Total Assets

Adjusted total assets followed a similar slight downward trajectory as reported total assets, decreasing from 23319 million USD in 2012 to 22953 million USD in 2014, depicting stability with minor reductions in asset base after adjustments.

Adjusted Return on Assets (Adjusted ROA)

Adjusted ROA increased notably from 8.85% in 2012 to 14.45% in 2013, signaling improved operational efficiency on an adjusted basis. This metric then experienced a pronounced decline to 2.61% in 2014, suggesting that adjusted efficiency and profitability significantly deteriorated during that period.