Analysis of Profitability Ratios
Quarterly Data
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Kraft Foods Group Inc., profitability ratios (quarterly data)
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
- Gross Profit Margin
- The gross profit margin exhibited a generally increasing trend from March 2012 through June 2014, rising from approximately 31.84% to a peak of 38.26%. This increase indicates improvement in cost management or pricing power during this period. However, a notable decline occurred starting in the first quarter of 2015, dropping sharply to 26.61% and further to 25.38%, suggesting a deterioration in production efficiency or increased cost pressures in the most recent periods.
- Operating Profit Margin
- The operating profit margin followed a similar pattern to gross profit margin, increasing steadily from 14.56% in March 2012 to a high of 25.94% by June 2014. This reflects expanding operational efficiency or reduced operating expenses over time. Nevertheless, the operating margin suffered a significant contraction in early 2015, falling to 10.38% and then 9.49%, which may indicate rising operational costs or weakening revenue streams affecting operating profitability.
- Net Profit Margin
- The net profit margin displayed growth through mid-2014, rising from 8.95% to a peak of 15.34%. This improvement suggests overall enhanced profitability after accounting for expenses, taxes, and interest. Yet, the margin sharply declined in the subsequent quarters to 5.73% and 5.27% in 2015, highlighting a reduction in bottom-line profitability possibly due to higher expenses or lower revenues impacting net income.
- Return on Equity (ROE)
- Return on equity showed strong performance initially, with values fluctuating around the high 30s to low 40s percentage range from 2012 until mid-2014, reaching a peak of 52.34% in March 2014. This high ROE indicates effective use of shareholder equity to generate earnings during that timeframe. However, there was a noticeable decline starting in late 2014 and continuing into 2015, dropping to 23.89% and subsequently 21.23%, which may reflect lower net income or increased equity base diminishing the overall returns generated for shareholders.
- Return on Assets (ROA)
- Return on assets improved modestly from 7.04% in early 2012 to a maximum of 11.87% by mid-2014, illustrating enhanced asset utilization in generating profit. Similarly to other profitability ratios, this was followed by a considerable decrease to 4.55% and then 4.15% in 2015, implying a decline in the efficiency of asset use or profitability linked to asset base during the latest periods.
Return on Sales
Return on Investment
Gross Profit Margin
Kraft Foods Group Inc., gross profit margin calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Gross profit | 1,333) | 472) | 1,292) | 1,521) | 1,560) | 1,931) | 1,486) | 1,936) | 1,470) | 1,168) | 1,587) | 1,636) | 1,449) | |||||
| Net revenues | 4,352) | 4,696) | 4,400) | 4,747) | 4,362) | 4,595) | 4,394) | 4,716) | 4,513) | 4,494) | 4,606) | 4,786) | 4,453) | |||||
| Profitability Ratio | ||||||||||||||||||
| Gross profit margin1 | 25.38% | 26.61% | 34.82% | 35.90% | 38.26% | 37.45% | 33.45% | 33.61% | 31.85% | 31.84% | — | — | — | |||||
| Benchmarks | ||||||||||||||||||
| Gross Profit Margin, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Nike Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Gross profit margin = 100
× (Gross profitQ1 2015
+ Gross profitQ4 2014
+ Gross profitQ3 2014
+ Gross profitQ2 2014)
÷ (Net revenuesQ1 2015
+ Net revenuesQ4 2014
+ Net revenuesQ3 2014
+ Net revenuesQ2 2014)
= 100 × (1,333 + 472 + 1,292 + 1,521)
÷ (4,352 + 4,696 + 4,400 + 4,747)
= 25.38%
2 Click competitor name to see calculations.
- Gross Profit
- The gross profit exhibited significant fluctuations throughout the reported periods. Starting at 1,449 million US dollars in the first quarter of 2012, there was an upward trend reaching a peak of 1,936 million US dollars by the second quarter of 2013. Subsequent quarters showed volatility, with gross profit values oscillating between approximately 1,300 million and 1,900 million US dollars. A notable decline occurred in the last quarter of 2014, where gross profit dropped sharply to 472 million US dollars, before recovering to 1,333 million US dollars in the first quarter of 2015. This irregular behavior suggests episodic challenges or one-time events impacting profitability.
- Net Revenues
- Net revenues demonstrated relative stability with moderate fluctuations over the analyzed timeline. Values fluctuated around a band from approximately 4,350 million to 4,800 million US dollars each quarter. The data show no clear upward or downward trend but indicate some cyclical variation. For example, net revenues decreased from 4,513 million in the first quarter of 2013 to 4,394 million in the third quarter of the same year, followed by periods of recovery. The revenues remained broadly consistent, ending at 4,352 million US dollars in the first quarter of 2015, comparable to earlier periods.
- Gross Profit Margin
- The gross profit margin began reporting from the first quarter of 2013 and revealed a pattern of moderate improvement followed by a sharp decline towards the end of the period. Initially, margins stabilized at around 31.8%, then increased to a high of 38.26% in the second quarter of 2014. After this peak, the margin gradually declined, falling sharply to 25.38% in the first quarter of 2015. This decrease in margin despite relatively stable revenues indicates rising costs of goods sold or other operational pressures impacting profitability.
- Overall Insights
- While net revenues maintained a fairly steady level, gross profit and gross profit margin experienced notable volatility. The sharp reduction in gross profit and margin in late 2014 and early 2015 suggests challenges, possibly including cost inflation or operational inefficiencies, which detracted from profitability. The disparity between stable revenues and varying profitability metrics points toward external or internal factors affecting cost management. Monitoring cost structure and operational performance is advisable to understand and mitigate the volatility seen in recent quarters.
Operating Profit Margin
Kraft Foods Group Inc., operating profit margin calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Operating income | 740) | (614) | 726) | 874) | 904) | 1,514) | 870) | 1,398) | 809) | 261) | 757) | 911) | 741) | |||||
| Net revenues | 4,352) | 4,696) | 4,400) | 4,747) | 4,362) | 4,595) | 4,394) | 4,716) | 4,513) | 4,494) | 4,606) | 4,786) | 4,453) | |||||
| Profitability Ratio | ||||||||||||||||||
| Operating profit margin1 | 9.49% | 10.38% | 22.19% | 23.00% | 25.94% | 25.20% | 18.42% | 17.60% | 14.88% | 14.56% | — | — | — | |||||
| Benchmarks | ||||||||||||||||||
| Operating Profit Margin, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Nike Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Operating profit margin = 100
× (Operating incomeQ1 2015
+ Operating incomeQ4 2014
+ Operating incomeQ3 2014
+ Operating incomeQ2 2014)
÷ (Net revenuesQ1 2015
+ Net revenuesQ4 2014
+ Net revenuesQ3 2014
+ Net revenuesQ2 2014)
= 100 × (740 + -614 + 726 + 874)
÷ (4,352 + 4,696 + 4,400 + 4,747)
= 9.49%
2 Click competitor name to see calculations.
The financial data reveals several notable trends over the observed periods. Net revenues exhibit fluctuations, generally oscillating between approximately 4,350 million US dollars and 4,800 million US dollars, without a clear upward or downward trajectory. This suggests a relatively stable revenue base with periodic variations.
Operating income shows more pronounced variability, with significant peaks and troughs throughout the quarters. Initially, operating income increased from 741 million US dollars at the end of Q1 2012 to a high of 1,514 million US dollars by Q4 2013, indicating a period of strong operational performance. However, this was followed by a sharp decline into negative territory (-614 million US dollars) by Q4 2014, suggesting challenges or extraordinary expenses during that quarter. The final quarter in the data shows a recovery to 740 million US dollars.
The operating profit margin, available from Q4 2012 onward, mirrors the fluctuations in operating income. It starts at 14.56% in Q4 2012 and rises steadily to a peak of 25.94% in Q2 2014, indicating increased profitability relative to net revenues during this period. Subsequently, the margin declines to 9.49% by Q1 2015, reflecting the decrease in operating income and signaling reduced operational efficiency or increased costs impacting profitability.
- Net Revenues
- Display a generally stable pattern with moderate quarter-to-quarter variations between 4,350 and 4,800 million US dollars.
- Operating Income
- Exhibit significant fluctuations; increasing through 2012 and 2013, peaking in late 2013, followed by a steep decline into negative figures in late 2014, and a subsequent recovery in early 2015.
- Operating Profit Margin
- Show an upward trend peaking mid-2014, corresponding with strong operating income, then a marked decrease toward early 2015, indicating pressure on profitability.
Overall, the data suggest the company experienced a phase of robust operational performance culminating in mid-2014, while the latter quarters reflected operational challenges that adversely affected profitability, despite relatively steady net revenues.
Net Profit Margin
Kraft Foods Group Inc., net profit margin calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Net earnings | 429) | (398) | 446) | 482) | 513) | 930) | 500) | 829) | 456) | 90) | 466) | 603) | 483) | |||||
| Net revenues | 4,352) | 4,696) | 4,400) | 4,747) | 4,362) | 4,595) | 4,394) | 4,716) | 4,513) | 4,494) | 4,606) | 4,786) | 4,453) | |||||
| Profitability Ratio | ||||||||||||||||||
| Net profit margin1 | 5.27% | 5.73% | 13.10% | 13.40% | 15.34% | 14.90% | 10.35% | 10.04% | 8.78% | 8.95% | — | — | — | |||||
| Benchmarks | ||||||||||||||||||
| Net Profit Margin, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Nike Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
Net profit margin = 100
× (Net earningsQ1 2015
+ Net earningsQ4 2014
+ Net earningsQ3 2014
+ Net earningsQ2 2014)
÷ (Net revenuesQ1 2015
+ Net revenuesQ4 2014
+ Net revenuesQ3 2014
+ Net revenuesQ2 2014)
= 100 × (429 + -398 + 446 + 482)
÷ (4,352 + 4,696 + 4,400 + 4,747)
= 5.27%
2 Click competitor name to see calculations.
- Net Earnings
- Over the observed quarters, net earnings exhibited significant volatility. Initial values in 2012 showed a rise from 483 million USD in March to a peak of 603 million USD in June, followed by a general decline and abrupt drop to 90 million USD by December 2012. In 2013, earnings recovered and peaked sharply at 930 million USD in December, indicating a strong year-end performance. However, 2014 saw a decline with earnings fluctuating between 446 million USD and 513 million USD in the first three quarters, culminating in a negative figure of -398 million USD in the last quarter, suggesting a substantial loss. The final quarter available, March 2015, showed a recovery to 429 million USD, but still below earlier peak levels.
- Net Revenues
- Net revenues remained relatively stable throughout the period with moderate fluctuations. Quarterly revenues fluctuated mostly between 4300 million USD and 4800 million USD with no clear upward or downward trend. The highest quarterly revenue was 4786 million USD in June 2012. After some variability, revenues declined slightly by March 2015 to 4352 million USD, indicating relatively consistent sales performance without significant growth.
- Net Profit Margin
- Profit margin data, available from December 2012 onwards, ranged from approximately 5.27% to 15.34%. Margins improved notably from 8.95% in December 2012 to a peak of 15.34% in June 2014, which coincides with a period of relatively stable earnings and revenues. After mid-2014, margins decreased sharply, falling to 5.27% by March 2015. This decline corresponds to the reported net losses in late 2014 and early 2015, indicating worsening profitability despite stable revenue levels.
- Overall Insights
- The data indicates that while revenue generation remained fairly stable, earnings and profitability experienced considerable fluctuations, reflecting periods of significant financial stress and recovery. The sharp losses recorded at the end of 2014 point to operational or one-time challenges impacting net earnings and margins despite steady revenue streams. The partial rebound in net earnings and margin in early 2015 suggests some recovery efforts were underway.
Return on Equity (ROE)
Kraft Foods Group Inc., ROE calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Net earnings | 429) | (398) | 446) | 482) | 513) | 930) | 500) | 829) | 456) | 90) | 466) | 603) | 483) | |||||
| Equity | 4,517) | 4,365) | 5,585) | 5,463) | 5,307) | 5,187) | 4,853) | 4,300) | 3,742) | 3,572) | 7,458) | 10,958) | 17,275) | |||||
| Profitability Ratio | ||||||||||||||||||
| ROE1 | 21.23% | 23.89% | 42.45% | 44.39% | 52.23% | 52.34% | 38.64% | 42.81% | 43.16% | 45.97% | — | — | — | |||||
| Benchmarks | ||||||||||||||||||
| ROE, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Nike Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
ROE = 100
× (Net earningsQ1 2015
+ Net earningsQ4 2014
+ Net earningsQ3 2014
+ Net earningsQ2 2014)
÷ Equity
= 100 × (429 + -398 + 446 + 482)
÷ 4,517 = 21.23%
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals notable fluctuations in net earnings, equity, and return on equity (ROE) over the observed periods.
- Net Earnings
- Net earnings exhibit considerable volatility, with values ranging from a high of 930 million US dollars in the quarter ending December 28, 2013, to a significant negative value of -398 million US dollars in the quarter ending December 27, 2014. The initial quarters from March 31, 2012, to September 30, 2012, show moderately strong earnings between 466 and 603 million US dollars, followed by a sharp decrease to 90 million in December 29, 2012. Subsequent quarters witness a recovery trend peaking at 930 million in late 2013 before declining again through 2014, culminating in the noted negative figure in December 2014. The final quarter to March 28, 2015, shows a partial recovery with net earnings of 429 million US dollars.
- Equity
- Equity demonstrates a general declining trend from the beginning to the end of the period. Starting at 17,275 million US dollars on March 31, 2012, equity decreases sharply to 3,572 million US dollars by December 29, 2012. Following this low point, equity gradually increases each quarter, reaching 5,585 million US dollars by September 27, 2014, before another decline to 4,365 million US dollars in December 27, 2014 and a slight increase to 4,517 million US dollars at the end of the period on March 28, 2015. This suggests periods of capital depletion followed by partial recovery.
- Return on Equity (ROE)
- The ROE is only reported from the quarter ending December 29, 2012, onwards. Initially, ROE is very high, peaking at 52.34% in March 29, 2014, indicating strong profitability relative to shareholder equity. However, a declining trend is observed after this peak, falling to 21.23% by March 28, 2015. Despite the fluctuations, the ROE remains elevated compared to typical industry standards throughout most reported periods, even as it declines gradually.
In summary, the financial data point to inconsistent net earnings with a major loss in late 2014, a significant drop and partial recovery in equity levels, and a generally high but decreasing ROE across the later periods. These patterns may indicate operational challenges and periods of financial restructuring or asset adjustments impacting profitability and equity base.
Return on Assets (ROA)
Kraft Foods Group Inc., ROA calculation (quarterly data)
| Mar 28, 2015 | Dec 27, 2014 | Sep 27, 2014 | Jun 28, 2014 | Mar 29, 2014 | Dec 28, 2013 | Sep 28, 2013 | Jun 29, 2013 | Mar 30, 2013 | Dec 29, 2012 | Sep 30, 2012 | Jun 30, 2012 | Mar 31, 2012 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||||||||||||||
| Net earnings | 429) | (398) | 446) | 482) | 513) | 930) | 500) | 829) | 456) | 90) | 466) | 603) | 483) | |||||
| Total assets | 23,134) | 22,947) | 22,803) | 23,345) | 23,361) | 23,148) | 23,126) | 23,064) | 23,267) | 23,329) | 22,284) | 21,889) | 22,095) | |||||
| Profitability Ratio | ||||||||||||||||||
| ROA1 | 4.15% | 4.55% | 10.40% | 10.39% | 11.87% | 11.73% | 8.11% | 7.98% | 6.94% | 7.04% | — | — | — | |||||
| Benchmarks | ||||||||||||||||||
| ROA, Competitors2 | ||||||||||||||||||
| lululemon athletica inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
| Nike Inc. | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||
Based on: 10-Q (reporting date: 2015-03-28), 10-K (reporting date: 2014-12-27), 10-Q (reporting date: 2014-09-27), 10-Q (reporting date: 2014-06-28), 10-Q (reporting date: 2014-03-29), 10-K (reporting date: 2013-12-28), 10-Q (reporting date: 2013-09-28), 10-Q (reporting date: 2013-06-29), 10-Q (reporting date: 2013-03-30), 10-K (reporting date: 2012-12-29), 10-Q (reporting date: 2012-09-30), 10-12B/A (reporting date: 2012-06-30), 10-12B/A (reporting date: 2012-03-31).
1 Q1 2015 Calculation
ROA = 100
× (Net earningsQ1 2015
+ Net earningsQ4 2014
+ Net earningsQ3 2014
+ Net earningsQ2 2014)
÷ Total assets
= 100 × (429 + -398 + 446 + 482)
÷ 23,134 = 4.15%
2 Click competitor name to see calculations.
The analysis of the quarterly financial data reveals several noteworthy trends over the observed periods.
- Net Earnings
- Net earnings display considerable volatility throughout the timeline. Starting at 483 million US$ in the first quarter of 2012, earnings peaked at multiple intervals such as 829 million in June 2013 and 930 million in December 2013. A significant dip is observed in the last quarter of 2014, where earnings sharply declined to -398 million, indicating a loss. The earnings recovered somewhat to 429 million in the first quarter of 2015. This pattern suggests fluctuations in profitability with occasional substantial downturns.
- Total Assets
- Total assets exhibit relative stability, fluctuating mildly between approximately 21,889 million and 23,361 million US$ across the periods. The asset base shows a modest upward trend from early 2012 through early 2015, with minor variations that do not indicate any major asset base contractions or expansions. This steadiness reflects consistent asset management or stable investment activities over the quarters.
- Return on Assets (ROA)
- ROA measurements are available starting from the quarter ended March 30, 2013. The metric shows an increasing trend from 6.94% to 11.87% between March and June 2014, indicating improved efficiency in asset utilization to generate earnings. However, after reaching this peak, ROA declines sharply to 4.15% by March 2015. This contraction in ROA aligns with the significant drop in net earnings toward the end of 2014, suggesting that despite a steady asset base, asset profitability weakened substantially in that period.
In summary, the company experienced periods of strong profitability interspersed with sharp declines, most notably in late 2014 where net earnings became negative and ROA decreased markedly. Meanwhile, total assets remained relatively constant, underscoring that the fluctuations in profitability and efficiency are not attributable to large changes in the asset base but rather to operational or market factors influencing earnings generation.