Twenty-First Century Fox Inc. (NASDAQ:FOX)

The analysis of the annual financial data reveals significant fluctuations in key performance indicators over the six-year period.

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibits considerable volatility, starting at 7,896 million USD in 2013, then sharply declining to 4,517 million USD in 2014. It rebounds strongly in 2015 to 9,417 million USD, almost doubling the previous year's value. However, it declines again in the subsequent years to a low of 4,025 million USD in 2016, followed by modest increases to 4,273 million USD in 2017 and 4,669 million USD in 2018. This inconsistency suggests an unstable profitability trend during the period analyzed.

Invested Capital

Invested capital shows a less volatile but somewhat fluctuating pattern. It begins at 44,434 million USD in 2013, increases to 48,265 million USD in 2014, then decreases to 44,315 million USD in 2015 and further declines to 42,462 million USD in 2016. The invested capital then rises again to 45,055 million USD in 2017 and further to 47,272 million USD in 2018. These movements suggest periodic adjustments in the capital base, potentially reflecting strategic investments or asset disposals.

Return on Invested Capital (ROIC)

The ROIC closely mirrors the trend in NOPAT but at a different scale. The ratio starts at a robust 17.77% in 2013, dropping significantly to 9.36% in 2014. It peaks at 21.25% in 2015, coinciding with the highest NOPAT recorded. Subsequently, it declines sharply to stabilize around 9.48% for 2016 and 2017, with a slight increase to 9.88% in 2018. The data indicates that the company had the most efficient capital use in 2015, while other years demonstrate a more moderate return on capital employed.

In summary, the financial indicators display a pattern of instability, with peaks in profitability and efficiency notably in 2015. Both profitability and capital efficiency metrics decline after that year and remain relatively subdued through 2018, despite incremental improvements in invested capital. This could indicate challenges in sustaining high returns or changes in the company's operational or investment environment during the latter years.

The analysis of the financial ratios over the six-year period reveals several notable trends and fluctuations. The operating profit margin (OPM) demonstrates significant variability, with a high of 37.99% recorded in 2015, which is markedly above the other annual figures. However, after this peak, the OPM declines and stabilizes at a lower range between approximately 18% and 21%, indicating a reduction in operating efficiency or profitability relative to sales in the latter years.

The turnover of capital (TO) shows relatively minor fluctuations throughout the periods under review. The ratio remains close to a narrow band around 0.62 to 0.66, suggesting consistent asset utilization efficiency for generating sales without significant expansion or contraction in capital turnover performance.

The metric expressed as 1 minus the effective cash tax rate (CTR) exhibits variability but remains at relatively high levels for most years, fluctuating between approximately 70.59% and 86.23%. This pattern suggests variability in the effective tax burden, with some years benefiting from higher tax shielding or lower tax incidence, impacting net profitability and cash flows.

Return on invested capital (ROIC) similarly reflects marked fluctuations, with a peak in 2015 at 21.25%, coinciding with the highest operating profit margin. However, in other years, ROIC is notably lower, hovering around or below 10%, which may indicate less efficient capital employment or a higher cost of capital impacting returns. The decline after 2015 aligns with the drop observed in OPM, implying operational and investment efficiency challenges in the periods following that peak.

Overall, the data suggests a company experiencing a peak in operational profitability and capital returns in 2015, followed by a period of subdued performance. The stability in capital turnover contrasts with the volatility in profitability and returns, highlighting operational or market factors influencing earnings rather than asset utilization. The changes in effective tax rates further add complexity to net profitability outcomes across the years.

Operating Profit Margin (OPM)

Highly variable with a peak in 2015, followed by a decline and stabilization at lower levels.

Turnover of Capital (TO)

Relatively stable with slight increases and decreases, indicating consistent asset use efficiency.

1 – Effective Cash Tax Rate (CTR)

Fluctuates significantly but remains generally high, affecting net profitability variability.

Return on Invested Capital (ROIC)

Peaks in 2015 along with OPM but mostly remains under 10% in other years, indicating variability in capital efficiency and profitability.

The financial data over the six-year period reveals fluctuating trends in profitability and revenues.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT shows notable volatility. Starting at 9,509 million USD in 2013, it declines sharply to 6,224 million USD in 2014, then peaks again at 10,921 million USD in 2015. Subsequently, it decreases to 5,120 million USD in 2016, with slight recoveries in 2017 and 2018 to 6,053 million USD and 5,572 million USD respectively. Overall, the profit levels demonstrate inconsistent performance without a clear upward or downward trend, indicating fluctuating operational efficiency or external factors affecting earnings before tax.

Adjusted Revenues

Adjusted revenues exhibit moderate variability. Revenues rise from 27,472 million USD in 2013 to a high of 31,880 million USD in 2014, followed by a decline to 27,383 million USD in 2016. From 2016 onward, revenues maintain a relatively stable trajectory with a slight increase, reaching 30,498 million USD by 2018. This pattern suggests some instability in top-line performance but overall a general maintenance of revenue levels across the period.

Operating Profit Margin (OPM)

The operating profit margin mirrors the fluctuations observed in NOPBT, with pronounced swings. The margin starts high at 34.61% in 2013, drops significantly to 19.52% in 2014, then rises sharply again to 37.99% in 2015. It decreases thereafter to 18.7% in 2016 and remains relatively low in subsequent years, ending at 18.27% in 2018. This indicates variability in cost control or operational efficiency, with a downward pressure on margins in the latter half of the period.

In summary, the company experienced considerable fluctuation in profitability and margins over the analyzed years, while revenues stayed comparatively more stable though with some volatility. The inconsistent profit margins and NOPBT suggest episodes of variable operational performance or external economic influences impacting profitability despite moderately steady revenue streams.

Adjusted revenues

The adjusted revenues exhibit a fluctuating pattern over the six-year period. Initially, there is a notable increase from 27,472 million US dollars in 2013 to 31,880 million US dollars in 2014. This is followed by a decline in 2015 and 2016, reaching 28,745 million and 27,383 million US dollars respectively. Revenues then show a recovery trend with an increase to 28,575 million in 2017 and further growth to 30,498 million US dollars in 2018. Overall, the revenue trend demonstrates volatility with a significant peak in 2014 and a partial recovery towards the end of the period.

Invested capital

Invested capital displays moderate variation throughout the period. Starting at 44,434 million US dollars in 2013, it rises to 48,265 million in 2014, levels slightly off at 44,315 million in 2015, and then experiences a decreasing trend to 42,462 million in 2016. Subsequently, invested capital increases again, reaching 45,055 million in 2017 and further to 47,272 million US dollars in 2018. This pattern indicates some fluctuations but a general upward movement in invested capital towards the end of the period.

Turnover of capital (TO)

The turnover of capital ratio remains relatively stable over the years, ranging narrowly between 0.62 and 0.66. It starts at 0.62 in 2013, peaks at 0.66 in 2014, and then maintains a consistent level around 0.63 to 0.65 from 2015 to 2018. This stability in turnover ratio suggests that the efficiency in using invested capital to generate revenues has been maintained without significant variation throughout the observed period.

Cash Operating Taxes

The cash operating taxes exhibit a fluctuating pattern over the analyzed periods. Starting at 1,612 million USD in mid-2013, the figure increased to 1,707 million USD in mid-2014, then declined to 1,504 million USD in mid-2015, followed by a more substantial decrease to 1,095 million USD in mid-2016. Subsequently, there was a notable rise to 1,781 million USD in mid-2017, after which the amount dropped sharply to 904 million USD in mid-2018. This variability suggests an inconsistent tax cash outflow trend with significant deviations occurring especially between 2016 and 2018.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes displays considerable volatility across the periods. It commenced at 9,509 million USD in mid-2013 before sharply declining to 6,224 million USD in mid-2014. The NOPBT then surged to a peak of 10,921 million USD in mid-2015, representing the highest point during the timeframe. However, this was followed by a steep drop to 5,120 million USD in mid-2016. Modest recoveries were observed in mid-2017 and mid-2018, with values at 6,053 million USD and 5,572 million USD respectively. Overall, the earnings before taxes reflect a highly unstable trend with no sustained growth over the analyzed years.

Effective Cash Tax Rate (CTR)

The effective cash tax rate experiences significant fluctuations throughout the examined period. Beginning at 16.96% in mid-2013, it rose markedly to 27.42% in mid-2014, then declined sharply to 13.77% in mid-2015. In mid-2016, the rate increased again to 21.39%, followed by another rise to 29.41% in mid-2017, which represents the highest tax rate within the timeframe. Finally, the tax rate dropped substantially to 16.22% in mid-2018. These changes indicate an inconsistent tax burden relative to operating profits, which may be influenced by varying tax regulations, profitability, or tax planning strategies over the years.