Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Walgreens Boots Alliance Inc., consolidated income statement

US$ in millions

12 months ended:	Aug 31, 2019	Aug 31, 2018	Aug 31, 2017	Aug 31, 2016	Aug 31, 2015	Aug 31, 2014
Sales	136,866)	131,537)	118,214)	117,351)	103,444)	76,392)
Cost of sales	(106,790)	(100,745)	(89,052)	(87,477)	(76,520)	(54,823)
Gross profit	30,076)	30,792)	29,162)	29,874)	26,924)	21,569)
Selling, general and administrative expenses	(25,242)	(24,569)	(23,740)	(23,910)	(22,571)	(17,992)
Equity earnings in AmerisourceBergen	164)	191)	135)	37)	—)	—)
Equity earnings in Alliance Boots	—)	—)	—)	—)	315)	617)
Operating income	4,998)	6,414)	5,557)	6,001)	4,668)	4,194)
Gain on previously held equity interest	—)	—)	—)	—)	563)	—)
Other income (expense)	233)	177)	(11)	(261)	685)	(481)
Earnings before interest and income tax provision	5,231)	6,591)	5,546)	5,740)	5,916)	3,713)
Interest expense, net	(704)	(616)	(693)	(596)	(605)	(156)
Earnings before income tax provision	4,527)	5,975)	4,853)	5,144)	5,311)	3,557)
Income tax provision	(588)	(998)	(760)	(997)	(1,056)	(1,526)
Post tax earnings from other equity method investments	23)	54)	8)	44)	24)	—)
Net earnings	3,962)	5,031)	4,101)	4,191)	4,279)	2,031)
Net (earnings) loss attributable to noncontrolling interests	20)	(7)	(23)	(18)	(59)	(99)
Net earnings attributable to Walgreens Boots Alliance, Inc.	3,982)	5,024)	4,078)	4,173)	4,220)	1,932)

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

Revenue exhibited consistent growth from 2014 to 2019, increasing from US$ 76,392 million to US$ 136,866 million. Despite this significant expansion in top-line sales, gross profit did not scale proportionally, peaking in 2018 at US$ 30,792 million before declining to US$ 30,076 million in 2019. This divergence indicates a steady compression of gross margins over the analyzed period.

Revenue and Gross Profitability: Sales growth was most aggressive between 2014 and 2016, followed by a more moderate pace through 2019. The cost of sales rose from US$ 54,823 million in 2014 to US$ 106,790 million in 2019, outstripping revenue gains and resulting in a diminished percentage of gross profit relative to total sales.
Operating Efficiency: Operating income displayed volatility, rising from US$ 4,194 million in 2014 to a peak of US$ 6,414 million in 2018, before falling sharply to US$ 4,998 million in 2019. This decline is attributed to a steady increase in selling, general, and administrative expenses, which grew from US$ 17,992 million to US$ 25,242 million over the six-year span.
Interest and Financial Obligations: A substantial upward trend is observed in net interest expense, which increased from US$ 156 million in 2014 to US$ 704 million in 2019. This represents a significant increase in financing costs, which acted as a drag on earnings before income tax provision.
Net Earnings Performance: Net earnings attributable to the company increased from US$ 1,932 million in 2014 to a peak of US$ 5,024 million in 2018, before contracting to US$ 3,982 million in 2019. The profitability trend mirrored the operating income pattern, suggesting that the decline in net earnings in the final year was primarily driven by operational headwinds and rising costs rather than tax-related fluctuations.

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Walgreens Boots Alliance Inc. (NASDAQ:WBA)

Income Statement