Common-Size Income Statement
Quarterly Data
Based on: 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31), 10-K (reporting date: 2018-12-31), 10-Q (reporting date: 2018-09-30), 10-Q (reporting date: 2018-06-30), 10-Q (reporting date: 2018-03-31).
The data reveals several notable trends in the financial performance over the observed periods.
- Gross Profit Margin
- Gross profit as a percentage of net sales generally fluctuates between approximately 55.6% and 61.2%. Initially maintaining around 60%, there is a gradual decline starting in 2021 through 2023, dipping to a low of about 55.6% in the first quarter of 2023, indicating pressure on cost efficiency or pricing.
- Cost of Sales
- The cost of sales percentage shows some variability but tends to increase over time, rising from margins near 39.8% in early 2018 to peaks above 44% in late 2022 and early 2023. This rising trend aligns inversely with the declining gross profit margin, suggesting increased costs or reduced pricing power.
- Selling, General and Administrative Expenses (SG&A)
- SG&A expenses as a percentage of net sales largely remain between 33.5% and 37.8%, showing minor fluctuations without a clear upward or downward trajectory. The proportion remains a significant share of net sales, maintaining pressure on operating margins.
- Operating Profit
- Operating profit margins display variability, generally oscillating between the low teens and mid-twenties percentage points. A sharp decline occurs in the fourth quarter of 2021, dropping to 8.29%, and again in the first quarter of 2023 to 4.36%, likely influenced by substantial impairment charges identified in those periods. Following these troughs, operating margins show some recovery.
- Goodwill and Indefinite-Lived Intangible Impairment Charges
- Significant impairment charges are recorded in the fourth quarter of 2021 and the first quarter of 2023, indicated by large negative percentages (-12.97% and -15.58%, respectively). These charges correspond to the notable dips in operating and net income margins during the same periods.
- Interest Income (Expense), Net
- Interest expense steadily represents a small negative portion of net sales, generally around -0.6% to -1.3%, with no pronounced trend. There is a slight increase in negative expense in some periods but overall remains stable.
- Income Before Income Taxes
- This metric tends to track operating profit trends, with dips corresponding to periods of impairment charges and other expenses. Income before taxes dropped markedly in Q4 2021 and Q1 2023, consistent with the observed impairments and lower operating profit.
- Provision for Income Taxes
- The tax provision as a percentage of net sales varies from roughly -7.3% to -1.9%, demonstrating some volatility that may relate to changes in pre-tax income and tax strategies. The proportion of tax expense declined notably in early 2023 compared to previous periods.
- Net Income
- Net income attributable to the company follows a pattern similar to operating profit and pre-tax income, with declines corresponding to impairment-related quarters. After relatively stable margins ranging mostly between 13% and 17%, net income drops sharply in Q4 2021 and Q1 2023 to single-digit or near-zero percentages, followed by partial recovery.
- Overall Observations
- Across the observed quarterly periods, the company demonstrates stable revenue proportions but experiences margin compression due to increasing cost of sales and sustained SG&A expenses. The occurrence of goodwill impairment charges significantly impacts profitability in specific quarters, causing pronounced declines in operating and net income margins. Despite these impacts, core operating profitability shows resilience with a tendency to recover post-impairment quarters.