Paramount Global (NASDAQ:PARA)

Net Operating Profit After Taxes (NOPAT)

The NOPAT displayed a general upward trend from 2018 through 2021, increasing from 2,342 million USD in 2018 to a peak of 5,241 million USD in 2021. However, in 2022 there was a significant decline, with NOPAT dropping sharply to 1,431 million USD. This drop represents a considerable reduction compared to the previous year and the earlier growth trend.

Invested Capital

Invested capital increased markedly from 15,419 million USD in 2018 to a high of 45,938 million USD in 2021. By 2022, invested capital saw a slight decrease to 44,287 million USD, but overall remained substantially higher than the levels at the beginning of the period. This signifies ongoing capital investment or asset accumulation over the five-year span, despite a small retreat in the latest year.

Return on Invested Capital (ROIC)

ROIC initially decreased from 15.19% in 2018 to 9.64% in 2019, and further declined slightly to 9.07% in 2020. It recovered somewhat in 2021 to 11.41%, but fell sharply to 3.23% in 2022. This volatility indicates worsening efficiency in generating returns from invested capital, especially notable in 2022 where the return fell to its lowest level in the five-year period, despite relatively stable invested capital near its peak.

Overall Insights

The data show a significant expansion of invested capital accompanied by volatile profitability and returns. While the company increased its asset base substantially through 2021, profitability measured by NOPAT and efficiency by ROIC have shown instability, with a notable decline in 2022. The sharp drop in NOPAT and ROIC in the latest year suggests challenges in effectively utilizing the invested capital to generate profits, which may warrant further analysis of operational or market factors impacting financial performance.

Operating Profit Margin (OPM)

The operating profit margin showed a fluctuating pattern over the observed period. Starting at 18.37% in 2018, it decreased to 16.29% in 2019 and slightly increased to 17.09% in 2020. A notable improvement occurred in 2021, reaching a peak of 20.95%. However, in 2022, there was a significant decline to 6.5%, indicating reduced operational profitability in the most recent year.

Turnover of Capital (TO)

Turnover of capital demonstrated a consistent downward trend from 2018 to 2021, falling from 0.94 to 0.62 and remaining stable at 0.62 in 2021. In 2022, a slight recovery was observed, increasing marginally to 0.68. This pattern suggests decreasing efficiency in the use of capital over the initial years, with a modest improvement toward the end of the period.

Effective Cash Tax Rate (1 – CTR)

The effective cash tax rate, measured as 1 minus the CTR, showed volatility but exhibited an overall decline from 2018 to 2022. The rate decreased from 87.91% in 2018 to 78.78% in 2019, then increased to 87.25% in 2021, before falling sharply to 73.39% in 2022. This trend indicates variations in the effective tax burden impacting cash flows, with a notable reduction in 2022.

Return on Invested Capital (ROIC)

ROIC experienced a downward trend from 2018 through 2020, declining from 15.19% to 9.07%. A moderate recovery was seen in 2021, rising to 11.41%, followed by a substantial drop in 2022 to 3.23%. This trend highlights a deteriorating ability to generate returns on invested capital in the latest year, despite some recovery during the preceding year.

The financial data reveals several notable trends over the five-year period analyzed. The net operating profit before taxes (NOPBT) experienced considerable fluctuation. It increased substantially from 2,664 million US dollars in 2018 to a peak of 6,006 million US dollars in 2021, followed by a sharp decline to 1,950 million US dollars in 2022. This pattern indicates a period of growth and improved profitability until 2021, after which the company faced a significant reduction in profit before taxes.

Adjusted revenues showed a strong upward trend throughout the period, starting at 14,504 million US dollars in 2018 and nearly doubling to 27,977 million US dollars in 2019. Although there was a slight dip in 2020 to 25,497 million US dollars, revenues rebounded in the subsequent years, reaching the highest value of 30,014 million US dollars in 2022. This steady increase, with minor volatility, suggests a generally expanding revenue base.

The operating profit margin (OPM) exhibited variability across the years. It declined initially from 18.37% in 2018 to 16.29% in 2019, then showed a moderate recovery to 17.09% in 2020 and a notable improvement to 20.95% in 2021. However, in 2022, the margin dropped sharply to 6.5%. The fluctuations in OPM correspond closely with changes in NOPBT, indicating variations in operational efficiency and cost management impacting profitability.

Net Operating Profit Before Taxes (NOPBT)

Experienced significant growth up to 2021, followed by a steep decline in 2022.

Adjusted Revenues

Displayed a robust upward trend with a slight dip in 2020, ultimately reaching a new high in 2022.

Operating Profit Margin (OPM)

Fluctuated over the period, peaking in 2021 before sharply decreasing in 2022, which may reflect increased costs or lower operational efficiency.

Overall, the company demonstrated revenue growth and profitability improvement through most of the period, but the significant decline in both NOPBT and OPM in 2022 signals potential challenges that affected operational profitability despite record revenues.

Adjusted Revenues

The adjusted revenues demonstrated significant growth from 2018 to 2019, increasing from 14,504 million USD to 27,977 million USD. Following this sharp rise, revenues experienced a decline in 2020 to 25,497 million USD, which may reflect external market pressures or operational challenges during that period. Subsequently, revenues showed a recovery and steady growth in 2021 and 2022, reaching 28,666 million USD and 30,014 million USD respectively, indicating an improving business environment or enhanced operational performance.

Invested Capital

Invested capital followed a trend of substantial growth over the period from 2018 to 2021, rising from 15,419 million USD to 45,938 million USD. This upward trajectory suggests increased investment or capital expenditure to support business expansion or restructuring efforts. However, in 2022, invested capital decreased slightly to 44,287 million USD, which could indicate a strategic optimization or a reduction in investment activities.

Turnover of Capital (TO)

The turnover of capital ratio declined markedly from 0.94 in 2018 to 0.75 in 2019, reflecting a reduced efficiency in utilizing capital to generate revenues. This declining trend continued into 2020 and 2021, stabilizing at 0.62 in both years, suggesting a sustained period of lower capital productivity. In 2022, there was a modest improvement to 0.68, indicating a slight recovery in how effectively the invested capital is being employed to produce revenue.

Overall Analysis

The data indicates that while revenues have generally grown over the period, there have been fluctuations likely influenced by market or internal factors. The consistent increase in invested capital until 2021 denotes strategic investment efforts, although the falling turnover of capital highlights a relative decrease in the efficiency of capital usage. The modest improvement in turnover in 2022 suggests initial positive effects from possible efficiency measures or changing market conditions. Continued monitoring of the relationship between invested capital and revenue generation will be critical to assess future financial performance and capital allocation effectiveness.

The financial data reveals several notable trends in the company's operating performance and tax obligations over the five-year period.

Cash Operating Taxes

The cash operating taxes showed an initial increase from 322 million US dollars in 2018 to a peak of 967 million in 2019. Afterwards, there was a decline to 633 million in 2020. The taxes rose again to 766 million in 2021 but decreased significantly to 519 million in 2022. This pattern suggests variability in tax obligations, possibly influenced by changes in taxable income or tax planning strategies.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes increased substantially from 2,664 million US dollars in 2018 to 4,557 million in 2019, marking significant growth. However, there was a slight decline to 4,359 million in 2020. The profit then rose sharply to a peak of 6,006 million in 2021, followed by a steep drop to 1,950 million in 2022. The large reduction in 2022 indicates a considerable downturn in operating profitability for that year.

Effective Cash Tax Rate (CTR)

The effective cash tax rate displayed marked fluctuations across the years. It increased notably from 12.09% in 2018 to 21.22% in 2019, then dropped to 14.52% in 2020 and slightly decreased further to 12.75% in 2021. In 2022, the rate rose sharply to 26.61%. This sharp increase in 2022 suggests a higher tax burden relative to operating profits, coinciding with the significant drop in net operating profit before taxes during the same period.

Overall, the data indicates that while there was considerable growth in operating profit in the middle of the period, the final year showed a significant decline. The variability in effective cash tax rates and cash operating taxes highlights changing tax dynamics which, coupled with the drop in profitability in 2022, may warrant further analysis to understand underlying causes.