EMC Corp. (NYSE:EMC)

Total Asset Turnover

The reported total asset turnover ratio demonstrates a slight decline from 0.58 in 2011 to 0.53 in 2015, indicating a marginal decrease in asset efficiency over the period. The adjusted ratio follows a similar pattern, falling from 0.62 in 2011 to 0.54 in 2015, reflecting a consistent, though modest, reduction in the turnover of total assets.

Current Ratio

The reported current ratio shows some fluctuation, increasing from 1.12 in 2011 to a peak of 1.46 in 2013 before gradually decreasing to 1.17 in 2015. The adjusted current ratio, which is higher across all periods, rises steadily from 1.65 in 2011 to 2.75 in 2014, then declines to 2.46 in 2015. This suggests enhanced short-term liquidity management initially, tapering slightly in the last reported year.

Debt to Equity Ratio

The reported debt to equity ratio exhibits volatility, starting at 0.17 in 2011, dropping significantly to 0.07 in 2012, before climbing to 0.32 in 2015. The adjusted debt to equity ratio follows a comparable trend but with generally lower values, indicating fluctuating leverage with a recent increase in reliance on debt financing relative to equity.

Debt to Capital Ratio

Both reported and adjusted debt to capital ratios mirror the debt to equity trends, with the reported ratio moving from 0.15 in 2011 to 0.24 in 2015, and the adjusted ratio increasing from 0.14 to 0.21 over the same period. This suggests a gradual rise in the proportion of debt within the overall capital structure.

Financial Leverage

Reported financial leverage shows an upward trend, increasing from 1.81 in 2011 to 2.20 in 2015, indicating growing use of debt to finance assets. The adjusted leverage ratio is consistently lower but follows a similar rising pattern, moving from 1.32 to 1.44, reinforcing the observation of increased financial leverage over time.

Net Profit Margin

The reported net profit margin declines notably from 12.3% in 2011 to 8.06% in 2015, suggesting decreasing profitability. The adjusted margin is higher but similarly trending downward, dropping from 17.78% in 2011 to 9.37% in 2015. This decline points to diminishing efficiency in converting revenue into profit.

Return on Equity (ROE)

Reported ROE slightly decreases from 12.98% in 2011 to 9.41% in 2015, while adjusted ROE shows a more pronounced decline from 14.51% to 7.20% over the same period. The reduction in ROE indicates decreasing effectiveness in generating returns on shareholder equity.

Return on Assets (ROA)

Reported ROA consistently falls from 7.18% in 2011 to 4.27% in 2015. The adjusted ROA shows a similar downturn from 11.01% to 5.02%. This trend reflects a decline in the company's ability to generate profit from its asset base.

The financial data over the five-year period exhibits several notable trends in revenue, asset base, and asset utilization efficiency.

Revenues

The reported revenues demonstrate a consistent upward trend from 20,008 million US dollars in 2011 to 24,704 million US dollars in 2015. The growth, however, slows down noticeably between 2014 and 2015, with revenues nearly plateauing.

Total Assets

Total assets experienced a substantial increase, rising steadily from 34,268 million US dollars in 2011 to 46,612 million US dollars in 2015. The largest year-over-year increase occurred between 2012 and 2013, indicating significant asset accumulation during this interval.

Reported Total Asset Turnover

The reported total asset turnover ratio, which measures how efficiently assets generate revenue, shows a declining trend over the period. It decreased from 0.58 in 2011 to a low point of 0.51 in 2013, followed by a slight recovery to 0.53 in 2014 and 2015. This pattern suggests reduced efficiency in asset utilization during the early years, with a modest improvement thereafter.

Adjusted Revenues and Adjusted Total Assets

Adjusted revenues follow a similar upward pattern as reported revenues, increasing from 21,518 million US dollars in 2011 to a peak of 25,626 million US dollars in 2014, before a small decline to 25,341 million US dollars in 2015. Adjusted total assets also increase steadily from 34,742 million US dollars in 2011 to 47,326 million US dollars in 2015. This adjustment suggests refinement in measurement but maintains the overall trends.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio decreases from 0.62 in 2011 to 0.53 in 2013, with minor recovery to 0.55 in 2014, and a slight decline to 0.54 in 2015. This trajectory mirrors the reported turnover ratio, indicating persistent challenges in maintaining asset efficiency despite asset growth and revenue increases.

Overall, the data indicates that while both revenues and assets have grown over the observed period, the efficiency with which the company utilizes its assets to generate revenue has deteriorated somewhat, stabilizing at a lower level than at the beginning of the period. The slight slowdown in revenue growth and marginal improvements in asset turnover ratios towards the end of the period may warrant attention for enhancing operational efficiency.

Current Assets

Current assets increased from US$ 11,583 million in 2011 to a peak of US$ 17,278 million in 2013, followed by a decline to US$ 15,063 million in 2015. This indicates growth in short-term resources until 2013, with a subsequent contraction over the next two years.

Current Liabilities

Current liabilities showed a moderate upward trend, rising from US$ 10,376 million in 2011 to US$ 12,885 million in 2015. The increase was relatively steady, reflecting a growth in short-term obligations over the period.

Reported Current Ratio

The reported current ratio improved from 1.12 in 2011 to a high of 1.46 in 2013, signifying better short-term liquidity. However, this ratio declined to 1.17 in 2015, suggesting a slight weakening in the ability to cover current liabilities with current assets.

Adjusted Current Assets

The adjusted current assets followed a trend similar to the reported current assets, rising from US$ 10,911 million in 2011 to a maximum of US$ 16,428 million in 2013 before declining to US$ 15,153 million in 2015. The adjustments appear to lower the reported asset base but maintain the overall pattern of growth and subsequent decline.

Adjusted Current Liabilities

Adjusted current liabilities decreased from US$ 6,601 million in 2011 to US$ 5,376 million in 2012, then fluctuated between US$ 5,364 million and US$ 6,170 million from 2013 to 2015. This indicates a generally more conservative view of liabilities, with less growth in obligations than reported.

Adjusted Current Ratio

The adjusted current ratio exhibited a strong upward trend from 1.65 in 2011 to 2.75 in 2014, indicating substantially improved liquidity when adjustments are considered. The ratio then decreased slightly to 2.46 in 2015, still reflecting a solid buffer of adjusted current assets over adjusted liabilities.

Overall Insights

The analysis indicates that while both reported and adjusted current assets and liabilities show similar directional trends, adjustments generally present a healthier liquidity position. The reported current ratio suggests a peak in liquidity around 2013 followed by some deterioration, whereas the adjusted ratio implies stronger and more sustained liquidity throughout the period. These discrepancies may be due to specific accounting adjustments that more accurately reflect the company's short-term financial health.

Total Debt

The total debt exhibits a fluctuating trend over the five-year period. It decreased significantly from 3,305 million US dollars at the end of 2011 to 1,652 million at the end of 2012. Subsequently, there was a sharp increase to 7,159 million in 2013, followed by a decrease to 5,495 million in 2014, and then an increase again to 6,774 million in 2015. This pattern indicates periods of debt reduction followed by notable increases, reflecting changing financing or capital structuring strategies within the company.

Total Shareholders' Equity

The reported shareholders’ equity shows a generally stable but slightly declining trend after peaking in 2012. Specifically, equity rose from 18,959 million US dollars in 2011 to 22,357 million in 2012, then remained near that level through 2013 (22,301 million). From 2014 onward, equity showed a gradual decrease, reaching 21,140 million by the end of 2015. This suggests marginal erosion of equity in the latter years, possibly due to distributions, losses, or other capital adjustments.

Reported Debt to Equity Ratio

The reported debt-to-equity ratio aligns with the fluctuations in total debt. It decreased from 0.17 in 2011 to 0.07 in 2012, reflecting reduced debt burden relative to equity. However, it rose sharply to 0.32 in 2013, then decreased to 0.25 in 2014, before rising back to 0.32 in 2015. These movements mirror the volatility in debt levels relative to relatively stable equity, suggesting periods of leverage increase followed by partial deleveraging.

Adjusted Total Debt

The adjusted total debt follows a pattern similar to reported total debt but at consistently higher values, indicating additional debt considerations. It declined from 4,450 million in 2011 to 2,942 million in 2012, then escalated sharply to 8,530 million in 2013. Afterwards, it declined to 7,199 million in 2014 before increasing again to 8,562 million in 2015. This confirms the presence of additional debt-like obligations that contribute to the company’s overall leverage.

Adjusted Total Shareholders’ Equity

The adjusted shareholders’ equity increased steadily from 26,368 million in 2011 to a peak of 33,149 million in 2014, followed by a slight decline to 32,964 million in 2015. The consistent growth until 2014 indicates strengthening capital, though the minor reduction in 2015 suggests some capital pressures or accounting adjustments impacting net equity.

Adjusted Debt to Equity Ratio

This ratio shows a relatively stable leverage position, with a low point of 0.09 in 2012 following debt reduction, and a rise to around 0.26 from 2013 through 2015. The ratio’s increase parallels the adjusted debt’s sharp increases, though the overall level remains moderate, indicating a controlled but increased leverage position in recent years.

Overall Insights

Throughout the period under review, the company’s indebtedness experienced significant fluctuations, particularly notable with a substantial rise in 2013. Shareholders’ equity was relatively stable with minor fluctuations, showing slight erosion toward the end of the timeframe. The debt-to-equity ratios, both reported and adjusted, indicate that the company’s leverage was generally low to moderate, with a noticeable increase beginning in 2013. This suggests a shift toward increased borrowing or recognizing additional liabilities from 2013 onwards, balanced by relatively stable equity levels. The adjustments to debt and equity underline the importance of considering off-balance sheet or additional financial elements when evaluating the company’s financial leverage.

Total debt

The total debt exhibited significant fluctuations over the five-year period. It decreased sharply from 3,305 million US$ in 2011 to 1,652 million US$ in 2012, representing a reduction by roughly half. However, it then increased substantially to 7,159 million US$ in 2013. Following this peak, total debt declined to 5,495 million US$ in 2014 but rose again to 6,774 million US$ in 2015. Overall, the trend shows volatility with a substantial net increase from 2011 to 2015.

Total capital

Total capital demonstrated a generally upward trend, increasing from 22,264 million US$ in 2011 to 27,914 million US$ in 2015. The growth was steady with the exception of a slight dip in 2014 from 29,460 million US$ in 2013 to 27,391 million US$. The 2015 value slightly recovered from 2014 but did not reach the 2013 peak. This suggests moderate capital base expansion over the period.

Reported debt to capital ratio

The reported debt to capital ratio mirrored the volatility observed in total debt. Starting at 0.15 in 2011, the ratio dropped to 0.07 in 2012, reflecting the reduction in total debt relative to capital. It then increased substantially to 0.24 in 2013, followed by a decrease to 0.20 in 2014, and returned to 0.24 in 2015. The ratio’s movements indicate variability in financial leverage with intermittent periods of increased debt burden relative to capital.

Adjusted total debt

The adjusted total debt, which likely accounts for additional liabilities or off-balance sheet items, followed a trend similar to total debt but at consistently higher values. It decreased from 4,450 million US$ in 2011 to 2,942 million US$ in 2012, then surged to 8,530 million US$ in 2013. Subsequently, it decreased to 7,199 million US$ in 2014 but rose again to 8,562 million US$ in 2015. The adjusted figures suggest more pronounced fluctuations and a higher overall debt level than the reported figures.

Adjusted total capital

Adjusted total capital, presumably considering adjustments for anomalies or additional capitalized items, rose steadily from 30,818 million US$ in 2011 to 41,526 million US$ in 2015. Although there was a slight decline from 41,112 million US$ in 2013 to 40,348 million US$ in 2014, the overall trend indicates growth in the capital base when adjusting for these additional items.

Adjusted debt to capital ratio

The adjusted debt to capital ratio remained lower than or equal to the reported ratio in earlier years but showed a similar directional pattern over time. Starting at 0.14 in 2011, it declined to 0.09 in 2012, rose to 0.21 in 2013, decreased to 0.18 in 2014, and climbed back to 0.21 in 2015. This pattern signifies variability in leverage but with adjusted values reflecting slightly less pronounced debt pressure relative to capital compared to reported figures in some years.

The financial data exhibits a general growth in total assets over the five-year period, increasing from 34,268 million US dollars at the end of 2011 to 46,612 million US dollars by the end of 2015. This represents a significant expansion, particularly notable in the jump between 2012 and 2013.

Examining shareholders’ equity, the reported figures show a peak in 2012 at 22,357 million US dollars followed by a gradual decline to 21,140 million US dollars by the end of 2015. This suggests some erosion in equity post-2012 under the reported method of calculation.

The reported financial leverage ratio initially decreases from 1.81 in 2011 to 1.7 in 2012, indicating modest deleveraging. However, from 2013 onward, this ratio increases steadily to 2.2 in 2015, reflecting a rising reliance on debt financing relative to equity capital.

When considering the adjusted figures, both adjusted total assets and adjusted shareholders’ equity show consistent growth over the period. Adjusted total assets rise from 34,742 million US dollars in 2011 to 47,326 million US dollars in 2015, mirroring the trend seen in reported assets but at slightly higher levels due to adjustments.

Adjusted shareholders’ equity demonstrates an increasing trend from 26,368 million US dollars in 2011 to a peak of 33,149 million in 2014, with a slight dip to 32,964 million in 2015. Unlike the reported equity, the adjusted equity indicates an overall strengthening of the equity base throughout the period.

The adjusted financial leverage ratio trends downward from 1.32 in 2011 to 1.24 in 2012, indicating an initial reduction in leverage. It then increases to 1.42 in 2013 and stabilizes around 1.4-1.44 in the subsequent years, which implies a modest increase but relatively stable leverage compared to the sharper increase seen in the reported leverage.

In summary, the company shows growth in assets with differing implications depending on the measurement method. Reported equity diminishes slightly over time while adjusted equity grows, leading to a divergence in reported versus adjusted financial leverage trends. The adjusted figures suggest a more conservative and stable leverage position compared to the reported metrics, which indicate increased financial risk from higher leverage in the latter years examined.

Net Income Attributable to EMC Corporation

The net income shows a general upward trend from 2011 to 2013, increasing from 2,461 million USD to 2,889 million USD. However, it declines in subsequent years, reaching 1,990 million USD in 2015, indicating a downward trend in profitability in the latter part of the period.

Revenues

Revenues demonstrate a consistent growth over the entire period, rising from 20,008 million USD in 2011 to 24,704 million USD in 2015. The growth rate appears to slow down slightly in 2015, with revenues increasing marginally compared to previous years.

Reported Net Profit Margin

The reported net profit margin follows a declining pattern overall. Starting at 12.3% in 2011, it experiences a slight increase to 12.58% in 2012 but then decreases steadily each year, reaching 8.06% in 2015. This decline reflects reduced profitability relative to revenues over time.

Adjusted Net Income

Adjusted net income increases from 3,827 million USD in 2011 to a peak of 4,088 million USD in 2013, mirroring the trend observed in reported net income. After 2013, adjusted net income declines substantially to 2,375 million USD by 2015, consistent with the decrease in reported net income.

Adjusted Revenues

Adjusted revenues rise steadily from 21,518 million USD in 2011 to 25,626 million USD in 2014 before a slight drop to 25,341 million USD in 2015. This trend aligns closely with reported revenues and indicates relatively stable revenue generation when adjustments are considered.

Adjusted Net Profit Margin

The adjusted net profit margin shows a notable decline over the period. Beginning at 17.78% in 2011, it remains relatively stable until 2012 and 2013, with slight decreases. From 2013 onwards, the margin drops sharply to 9.37% in 2015, paralleling the trend seen in reported net profit margin and confirming a significant decrease in profitability efficiency after adjustments.

Overall Interpretation

Despite continuous revenue growth, both reported and adjusted net incomes and corresponding profit margins exhibit a declining trend in the latter years. This suggests increasing challenges in cost management or other operational aspects impacting profitability. The disparity between steady revenue increases and falling profit margins and incomes highlights potential pressure on margins that may warrant further operational or strategic review.

Net income attributable to EMC Corporation

The net income showed an overall increasing trend from 2011 to 2013, rising from 2,461 million US dollars to a peak of 2,889 million US dollars. However, after 2013, there was a decline, with net income falling to 2,714 million in 2014 and further decreasing significantly to 1,990 million in 2015.

Total EMC Corporation’s shareholders’ equity

Shareholders’ equity increased steadily from 18,959 million US dollars in 2011 to a high of 22,357 million in 2012, after which it remained relatively stable through 2013 to 2015 with marginal decreases, ending at 21,140 million US dollars in 2015.

Reported Return on Equity (ROE)

The reported ROE demonstrated a declining trend over the period analyzed. It started at 12.98% in 2011 and fluctuated slightly but generally decreased over the years, with a marked drop to 9.41% by 2015, indicating reduced profitability relative to shareholders’ equity.

Adjusted net income

The adjusted net income trends closely mirrored those of the reported net income but with higher values, reflecting adjustments likely accounting for non-recurring items or other factors. Adjusted net income peaked in 2013 at 4,088 million US dollars, then declined more sharply in subsequent years to 3,347 million in 2014 and further down to 2,375 million in 2015.

Adjusted total shareholders’ equity

Adjusted shareholders’ equity rose steadily from 26,368 million US dollars in 2011 to 33,149 million in 2014, with a slight decrease to 32,964 million in 2015. This indicates a general growth trend in the company’s equity base after taking adjustments into account.

Adjusted Return on Equity (ROE)

The adjusted ROE declined consistently from 14.51% in 2011 to 7.2% in 2015. This significant drop over the years suggests diminishing efficiency in generating returns on adjusted equity, reflecting either lower profitability or increased equity base not matched by profit growth.

Summary of Trends

Overall, the data indicate a period of growth in earnings and equity through the early years up to 2013, followed by a downtrend in profitability and net income from 2014 onward. Although shareholders’ equity remained relatively stable or grew slightly on an adjusted basis, both reported and adjusted ROE declined markedly, suggesting increasing challenges in maintaining profitability relative to equity. The adjustments highlight that while the underlying net income and equity are larger than reported, the decline in adjusted ROE confirms weakening financial performance on an adjusted basis.

Net Income Attributable to EMC Corporation

The net income shows an overall downward trend from 2011 to 2015. Starting at $2,461 million in 2011, it peaked at $2,889 million in 2013 before declining to $1,990 million by 2015, indicating a notable decrease in profitability in the last two years under review.

Total Assets

Total assets increased steadily over the five-year period, rising from $34,268 million in 2011 to $46,612 million in 2015. This growth suggests expansion in the company's asset base, although the rate of increase appears to slow between 2014 and 2015.

Reported Return on Assets (ROA)

The reported ROA shows a declining trend from 7.18% in 2011 and 2012 to 4.27% in 2015. This decrease signals a reduction in the efficiency with which the company is generating net income from its assets.

Adjusted Net Income

Adjusted net income also peaked early, at $4,088 million in 2013, followed by a significant decline to $2,375 million in 2015. The adjustment likely accounts for non-recurring items, and the downward trend reinforces the contraction in core earnings during the latter years.

Adjusted Total Assets

Adjusted total assets track closely to the reported total assets, increasing from $34,742 million in 2011 to $47,326 million in 2015. The consistent growth in adjusted assets supports the observation of company expansion or increased investments in asset holdings.

Adjusted Return on Assets (ROA)

The adjusted ROA exhibits a marked decline from 11.01% in 2011 to 5.02% in 2015, indicating a substantial reduction in asset profitability after adjustments. This trend reflects decreasing operational efficiency or profitability when extraordinary items are excluded.