Walgreens Boots Alliance Inc. (NASDAQ:WBA)

The financial data exhibits notable patterns and shifts over the six-year period, highlighting key aspects of profitability and efficiency.

Gross Profit Margin

The gross profit margin shows a steady decline from 28.23% in 2014 to 21.97% in 2019. This consistent decrease suggests increasing cost pressures or reduced pricing power over the years, potentially impacting the company’s ability to convert revenue into gross profit.

Operating Profit Margin

The operating profit margin experiences fluctuations but generally trends downward, from 5.49% in 2014 to 3.65% in 2019. Though there is a slight improvement in 2016 and 2018, the overall decline indicates challenges in controlling operating expenses relative to sales, which could affect operational efficiency and profitability.

Net Profit Margin

The net profit margin shows variability, improving initially from 2.53% in 2014 to a peak of 4.08% in 2015, but thereafter declines to 2.91% in 2019. Despite the mid-period recovery, the later decrease may reflect increased financial costs, taxes, or other non-operating expenses reducing the bottom-line profitability.

Return on Equity (ROE)

Return on equity reveals a positive trend over the period, increasing from 9.44% in 2014 to a high of 19.32% in 2018, before slightly decreasing to 16.94% in 2019. This overall improvement indicates enhanced effectiveness in generating returns for equity shareholders, possibly through better leverage or profit generation relative to shareholder equity.

Return on Assets (ROA)

The return on assets follows a somewhat cyclical pattern, rising from 5.2% in 2014 to 7.37% in 2018, then declining to 5.89% in 2019. This suggests variations in asset utilization efficiency, peaking before facing a downturn, which could be attributed to changes in operating performance or asset base composition.

Gross Profit

The gross profit exhibited a generally upward trend from 2014 through 2018, increasing from $21,569 million in 2014 to a peak of $30,792 million in 2018. However, in 2019, there was a slight decline to $30,076 million, indicating a small contraction after several years of growth.

Sales

Sales showed a consistent and significant increase over the entire period from 2014 to 2019. The revenue rose from $76,392 million in 2014 to $136,866 million in 2019, reflecting strong sales growth each year without any apparent downturns.

Gross Profit Margin

The gross profit margin demonstrated a continuous decline over the years. Starting at 28.23% in 2014, the margin decreased steadily each year to reach 21.97% in 2019. This suggests increasing cost pressures or changes in the product mix impacting profitability at the gross level.

Operating Income

The operating income exhibited an overall upward trend from 2014 through 2018, increasing from 4,194 million US dollars in 2014 to a peak of 6,414 million US dollars in 2018. However, there was a notable decline in 2019, with operating income decreasing to 4,998 million US dollars. This indicates a reduction in operational profitability in the last year of the period analyzed.

Sales

Sales demonstrated consistent growth throughout the entire period from 2014 to 2019. Beginning at 76,392 million US dollars in 2014, sales increased substantially each year, reaching 136,866 million US dollars in 2019. The steady rise in sales suggests a positive trend in revenue generation and market expansion or increased volume of transactions.

Operating Profit Margin

The operating profit margin experienced fluctuations over the period. It started at 5.49% in 2014, declined to 4.51% in 2015, and then showed some recovery to 5.11% in 2016. Subsequent years saw the margin settling around mid to high 4% levels, with a decline to 3.65% in 2019. The margin decline in 2019, despite rising sales, reflects potentially increased operating costs or reduced efficiency impacting profitability.

Summary

The data reveals a pattern where sales consistently increased year over year, yet operating income and operating profit margin did not always mirror this growth. The divergence in 2019, marked by decreased operating income and profit margin despite higher sales, could signal emerging challenges such as cost pressures, competitive factors, or investment expenses affecting operating profitability. Overall, while revenue growth is a strong positive indicator, the recent decline in profitability metrics warrants closer attention.

The financial data reveals several notable trends over the six-year period ending in August 2019. Sales showed a consistent upward trajectory, increasing each year from approximately $76.4 billion in 2014 to about $136.9 billion in 2019. This steady growth indicates expanding revenue generation over the period.

Net earnings attributable to the company exhibited more variability. After nearly doubling from approximately $1.9 billion in 2014 to $4.2 billion in 2015, net earnings slightly declined in the subsequent years, fluctuating around $4 billion before dropping to nearly $4 billion in 2019. This suggests some challenges in maintaining the heightened profit levels seen in 2015.

The net profit margin reflects the changes in profitability as a percentage of sales. It increased from 2.53% in 2014 to a peak of 4.08% in 2015, followed by a gradual decline, reaching 2.91% by 2019. The downward trend in net profit margin during the latter years indicates that despite rising sales, the company faced pressures that reduced profit efficiency. This could be due to increased costs, competitive pressures, or other operational factors affecting profitability.

Overall, while sales growth was robust and consistent, net earnings and net profit margins demonstrated volatility with a peak around 2015 followed by a gradual decline through 2019. This divergence suggests challenges in translating revenue growth into proportional profit gains in the later years.

The analysis of the annual financial data for the specified periods reveals several notable trends.

Net Earnings

Net earnings attributable to the company showed a significant increase from 1,932 million US dollars in 2014 to a peak of 5,024 million in 2018. However, there was a notable decline in 2019 to 3,982 million. This pattern indicates strong growth in profitability through 2018 followed by a downturn in the last reported year.

Total Shareholders’ Equity

The total shareholders’ equity increased markedly from 20,457 million US dollars in 2014 to a peak of 30,861 million in 2015. Afterward, it experienced a steady decline through the subsequent years, reaching 23,512 million by 2019. This decreasing trend in equity suggests possible share repurchases, dividend distributions exceeding earnings, or other factors contributing to a reduction in the company’s net asset base during this period.

Return on Equity (ROE)

ROE demonstrated a positive trajectory, increasing from 9.44% in 2014 to a high of 19.32% in 2018, reflecting improved profitability relative to equity. In 2019, ROE decreased to 16.94%, which, while still robust, indicates some moderation in return efficiency.

Overall, the data suggest the company experienced a period of growing profitability and efficiency in capital utilization culminating in 2018. The subsequent declines in net earnings, shareholders’ equity, and ROE in 2019 point to a potential shift in operational or market conditions affecting financial performance and equity structure. Further investigation into underlying causes would be warranted to understand these changes fully.

The financial data presents several key metrics over a period from 2014 to 2019, illustrating both growth and fluctuations in performance.

Net Earnings Attributable to Walgreens Boots Alliance, Inc.

The net earnings showed a remarkable increase between 2014 and 2015, more than doubling from 1,932 million USD to 4,220 million USD. Subsequently, earnings stabilized in the range of approximately 4,000 to 5,000 million USD from 2015 to 2019, peaking at 5,024 million USD in 2018 before declining to 3,982 million USD in 2019. This trend indicates a period of significant growth followed by slight volatility and a downward adjustment in the final year.

Total Assets

Total assets experienced a substantial increase between 2014 and 2015, nearly doubling from 37,182 million USD to 68,782 million USD. This elevated asset base was largely maintained through 2019, fluctuating moderately but remaining within a range of approximately 66,000 to 72,000 million USD. The initial surge suggests notable acquisitions or expansions during this time frame, with subsequent years reflecting asset base consolidation.

Return on Assets (ROA)

ROA exhibited an overall upward trend from 5.2% in 2014 to a peak of 7.37% in 2018, indicating improved efficiency in utilizing assets to generate earnings. However, this was followed by a decrease to 5.89% in 2019. The pattern reveals progressive enhancements in asset profitability for most of the period, with the decline in the final year potentially signaling challenges in maintaining operational efficiency or margin pressure.

In summary, the company experienced significant growth in earnings and assets between 2014 and 2015, with stable asset levels afterward. Profitability metrics improved over most years but demonstrated volatility in recent periods. The decline in both net earnings and ROA in 2019 suggests a need for further analysis to understand the drivers behind this downturn.