Walgreens Boots Alliance Inc. (NASDAQ:WBA)

The analysis of the annual financial data reveals several notable trends across the key metrics of net earnings, shareholders' equity, and return on equity (ROE) over the period spanning from 2005 to 2019.

Net Earnings

Net earnings attributable to the company demonstrated an overall upward trajectory, rising from $1,560 million in 2005 to a peak of $5,024 million in 2018. However, fluctuations were evident, with notable decreases in certain years. For instance, earnings peaked at $2,714 million in 2011, followed by a decline and volatility in subsequent years until a significant surge was observed in 2015 and 2016, reaching above $4,000 million. After the 2018 peak, earnings declined again to $3,982 million in 2019, indicating some instability or cyclical pressures impacting profitability near the end of the period.

Total Shareholders’ Equity

Shareholders’ equity experienced consistent growth from $8,890 million in 2005 to a high of $30,861 million in 2015, which marks a substantial increase in the company’s net assets over the decade. Post-2015, equity showed a downward trend, declining steadily each year to $23,512 million by 2019. This reduction suggests that despite robust earnings at times, the company may have engaged in significant shareholder distributions, share repurchases, or experienced asset revaluations leading to diminished equity levels. The peak in 2015 followed by a consistent decline suggests a shift in capital structure or strategic financial management decisions in the latter years.

Return on Equity (ROE)

The ROE ratio exhibited variability throughout the period, ranging between 9.44% and 19.32%. Initially, ROE remained strong, around 17% to 18%, from 2005 through 2011, indicating efficient use of equity to generate profits. Subsequently, it declined to a low point of 9.44% in 2014, which coincides with a period of relatively lower net earnings and increased equity base, potentially diluting returns. From 2015 onward, ROE showed a recovery trend, reaching a peak of 19.32% in 2018, the same year as the highest net earnings figure. This recovery suggests improvements in profitability or more efficient equity utilization, followed by a slight decrease to 16.94% in 2019, consistent with the decline observed in net earnings and equity.

Overall, the data illustrates a company that experienced solid growth in equity and earnings up to the mid-2010s, with a turning point around 2015 when equity and returns began to adjust downward. The fluctuations in ROE highlight periods of both strong profitability and challenges in maintaining consistent returns on shareholder investment. The peak in 2018 followed by declines in earnings and equity suggest that the latter part of the period may have involved strategic realignments or external pressures affecting financial performance.