Analysis of Investments
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Solvency Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Dividend Discount Model (DDM)
- Price to Operating Profit (P/OP) since 2005
- Analysis of Debt
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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Monster Beverage Corp., adjustment to net income
US$ in thousands
| 12 months ended: | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|---|
| Net income (as reported) | ||||||
| Add: Net change in available-for-sale investments | ||||||
| Net income (adjusted) |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The analysis of the net income data over the five-year period reveals notable trends in both reported and adjusted figures. Throughout the years, the values display general variability with some fluctuations rather than a strictly linear progression.
- Reported Net Income
- Starting at approximately 1,107,835 thousand US dollars in 2019, the reported net income experiences a significant increase by 2020, reaching around 1,409,594 thousand US dollars. This apex is followed by a slight decrease in 2021, where it drops marginally to 1,377,475 thousand US dollars. The downward trend continues more markedly in 2022 with reported net income falling to 1,191,624 thousand US dollars. However, the most recent data for 2023 shows a strong recovery and growth, with reported net income climbing to the highest point in the five-year period at approximately 1,630,988 thousand US dollars.
- Adjusted Net Income
- The adjusted net income closely mirrors the reported net income pattern, which indicates consistent adjustments with minimal divergence between the two figures each year. It begins at approximately 1,108,118 thousand US dollars in 2019 and increases significantly in 2020 to around 1,409,484 thousand US dollars. In 2021, it slightly decreases to about 1,376,434 thousand US dollars. The decline persists through 2022, where adjusted net income is reported at approximately 1,186,737 thousand US dollars. In 2023, adjusted net income rebounds strongly to its highest level over the period, reaching roughly 1,640,483 thousand US dollars.
Overall, the data suggests that after a peak in 2020, both reported and adjusted net incomes experienced declines in the subsequent two years, indicating potential challenges or increased costs during that period. However, the substantial increase in 2023 points towards a recovery and possible operational improvements or favorable market conditions contributing to enhanced profitability. The minimal differences between reported and adjusted net incomes underscore consistent financial adjustments with little impact on net income trends.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Monster Beverage Corp., adjusted profitability ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The analysis of the annual financial performance indicators reveals notable trends in profitability and efficiency metrics over the five-year period.
- Net Profit Margin
- Both reported and adjusted net profit margins exhibited an initial increase from approximately 26.37% in 2019 to a peak near 30.65% in 2020. Subsequently, the margins declined significantly in 2021 and 2022, reaching lows around 18.8% to 18.88%. A recovery phase is observed in 2023, with margins improving to 22.84% (reported) and 22.98% (adjusted). The close alignment between reported and adjusted figures suggests consistent adjustments and reliable margin reporting.
- Return on Equity (ROE)
- ROE indicators, both reported and adjusted, follow a broadly similar pattern to net profit margins. They rose modestly from 26.56%-26.57% in 2019 to around 27.31% in 2020. This was followed by a marked decline in 2021 and 2022 to levels near 16.89%-16.96%. Like net profit margins, a rebound occurs in 2023, with ROE recovering to approximately 19.82%-19.94%. This trend indicates fluctuations in shareholder returns, likely linked to profitability changes and possibly equity structure variations.
- Return on Assets (ROA)
- The ROA figures display a comparable trajectory but at somewhat lower levels relative to ROE, reflecting asset utilization efficiency. ROA increased from about 21.51%-21.52% in 2019 to 22.72%-22.73% in 2020. This was followed by a decrease through 2021 and 2022, reaching a minimum near 14.31%-14.37%. A subsequent improvement is evident in 2023, with ROA rising to approximately 16.84%-16.94%. This indicates a decline and partial recovery in asset profitability over the period.
Overall, the financial indicators demonstrate a pattern of strong profitability and efficiency in 2019 and 2020, a significant downturn during 2021 and 2022, and a partial recovery in 2023. The similarity between reported and adjusted figures across all metrics underscores consistency in the financial adjustments applied throughout the period analyzed.
Monster Beverage Corp., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 Net profit margin = 100 × Net income ÷ Net sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × ÷ =
The financial data over the five-year period demonstrates noticeable fluctuations in net income and profitability margins.
- Net Income Trends
- Both reported and adjusted net income figures exhibit a rising trend from 2019 through 2020, increasing from approximately 1.11 billion US dollars to around 1.41 billion US dollars. The following year, 2021, shows a slight decline in net income to roughly 1.38 billion US dollars for reported and 1.38 billion for adjusted values. This downward trend continues into 2022, with net income decreasing further to approximately 1.19 billion US dollars reported and 1.19 billion adjusted. By 2023, however, net income rebounds significantly, reaching about 1.63 billion US dollars reported and 1.64 billion adjusted, indicating a strong recovery or growth phase.
- Profit Margin Analysis
- The reported and adjusted net profit margins, expressed as percentages, show corresponding trends with net income. In 2019, net profit margins were approximately 26.37% (reported) and 26.38% (adjusted). These margins peak in 2020 at around 30.65% for both reported and adjusted, indicating improved profitability. In 2021, there is a marked contraction in profit margins to roughly 24.86% reported and 24.84% adjusted. This decline continues sharply into 2022, with margins dropping to 18.88% reported and 18.8% adjusted, reflecting reduced profitability during this period. The year 2023 sees a partial resurgence with profit margins increasing to about 22.84% reported and 22.98% adjusted.
- Overall Insights
- The data reveals a period of strong financial performance and growth between 2019 and 2020, followed by a gradual decline in profitability and net income through 2022. The recovery observed in 2023 points toward an improvement in operational efficiency or favorable market conditions restoring profit margins and income levels closer to earlier highs. The consistency between reported and adjusted figures indicates minimal impact from extraordinary items or accounting adjustments on the core financial results throughout the analyzed timeframe.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × ÷ =
- Net Income Trends
- Reported net income showed an overall increase from 1,107,835 thousand USD in 2019 to 1,630,988 thousand USD in 2023, despite a dip in 2022. The highest reported net income within the period was recorded in 2023. Adjusted net income followed a similar trajectory, rising from 1,108,118 thousand USD in 2019 to 1,640,483 thousand USD in 2023, also experiencing a slight decline in 2022 compared to the previous year.
- Return on Equity (ROE) Dynamics
- Both reported and adjusted ROE percentages demonstrated a declining trend from 2019 through 2022, with reported ROE decreasing from 26.56% in 2019 to 16.96% in 2022, and adjusted ROE falling from 26.57% to 16.89% in the same period. In 2023, there was an improvement in ROE values for both reported and adjusted measures, increasing to 19.82% and 19.94%, respectively, though still below the levels observed in 2019 and 2020.
- Comparison of Reported and Adjusted Figures
- The reported and adjusted net income figures are closely aligned throughout the period, with adjusted net income slightly exceeding reported net income in most years. Similarly, reported and adjusted ROE values are nearly identical, indicating minimal impact of adjustments on equity returns.
- Overall Insights
- The financial performance, as reflected by net income, generally improved over the five-year period, with a temporary decline in 2022 reverting to growth in 2023. The declining trend in ROE until 2022 suggests increasing equity base or pressure on profitability, followed by a recovery in 2023 that signals improved efficiency or profitability relative to shareholder equity. The close alignment between reported and adjusted figures suggests consistent accounting practices and limited non-recurring adjustments.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
2023 Calculations
1 ROA = 100 × Net income ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × ÷ =
The reported and adjusted net income figures exhibit fluctuations over the five-year period under analysis. Starting at approximately 1.11 billion USD in 2019, net income rose notably to nearly 1.41 billion USD in 2020. A slight decline followed in 2021, with reported net income falling to about 1.38 billion USD, and a more pronounced decrease occurred in 2022, reducing net income to approximately 1.19 billion USD. However, a strong recovery is apparent in 2023, with net income increasing sharply to around 1.63 billion USD.
Adjusted net income closely mirrors reported net income throughout the period, showing consistent alignment with only minor variations. This suggests that adjustments made for investment purposes do not materially alter the underlying profitability trends observed in the reported data.
Return on Assets (ROA), both reported and adjusted, follows a generally similar trajectory. The ROA peaked in 2020 at approximately 22.7%, indicating the company's highest efficiency in utilizing its assets to generate earnings during this year. Subsequently, ROA declined in 2021 and further in 2022, reaching its lowest point at about 14.3% (adjusted ROA). In 2023, an improvement is recorded, with ROA climbing back to nearly 16.9% (adjusted ROA), though still below the earlier peak levels.
- Net Income Trends
- Demonstrate an initial strong growth followed by a downturn in 2021 and 2022, before recovering robustly in 2023.
- Adjusted vs Reported Earnings
- Exhibit a high degree of correlation, indicating minimal discrepancies between the two measures over time.
- ROA Patterns
- Indicate optimal asset utilization in 2020, with a subsequent decline and partial recovery by 2023.
- Overall Financial Insight
- The company experienced volatility in profitability and asset efficiency, with mid-period declines reversing into growth by the latest reported year.