Ecolab Inc. (NYSE:ECL)

Total Asset Turnover

The reported total asset turnover ratio exhibited a declining trend over the five-year period, decreasing from 0.69 in 2017 to 0.60 in 2021. The adjusted total asset turnover followed a similar pattern, starting at 0.68 in 2017, peaking slightly at 0.72 in 2019, then declining to 0.60 in 2021. This indicates a progressive decrease in the efficiency with which assets are utilized to generate revenue.

Current Ratio

The reported current ratio remained relatively stable from 2017 through 2019, fluctuating around 1.3, before a notable increase to 1.75 in 2020 and a subsequent decrease to 1.32 in 2021. The adjusted current ratio mirrored this pattern, suggesting improved short-term liquidity in 2020, followed by a normalization in 2021.

Debt to Equity

The debt to equity ratio showed a decreasing trend from 0.96 in 2017 to 0.73 in 2019, implying a reduction in leverage during this period. However, it increased sharply to 1.08 in 2020 and further to 1.21 in 2021, indicating increased reliance on debt financing. The adjusted ratios support this observation with slightly lower but consistent values.

Debt to Capital

Debt to capital ratio decreased from 0.49 in 2017 to 0.42 in 2019, coinciding with the reduction in debt to equity. From 2020 onwards, it increased to 0.52 and 0.55, showing a shift towards higher debt levels within the capital structure. Adjusted ratios confirm a consistent trend.

Financial Leverage

Reported financial leverage dropped from 2.62 in 2017 to 2.40 in 2019, suggesting a modest decline in leverage, then increased sharply to 2.94 in 2020 and remained stable in 2021. Adjusted financial leverage followed a similar trajectory but with slightly lower values. This reflects heightened financial risk post-2019.

Net Profit Margin

The reported net profit margin showed a fluctuating trend, beginning at 10.9% in 2017, decreasing to 9.74% in 2018, and modestly rising to 10.46% in 2019. A significant negative margin of -10.22% occurred in 2020, indicating a period of loss, followed by a recovery to 8.87% in 2021. The adjusted net profit margin was more stable, with values mostly between 8.7% and 11.94%, suggesting some adjustments improved the apparent profitability, especially in 2020 and 2021.

Return on Equity (ROE)

Reported ROE declined from 19.8% in 2017 to 17.86% in 2018, remained steady at 17.95% in 2019, but then dropped drastically to -19.54% in 2020, recovering to 15.64% in 2021. Adjusted ROE showed less volatility, dipping from 15.23% in 2017 to 13.69% in 2019 but increasing to 19.08% in 2021, hinting at improved shareholder returns when excluding certain factors.

Return on Assets (ROA)

Reported ROA declined slightly from 7.56% in 2017 to 7.12% in 2018, held steady at 7.47% in 2019, then turned negative to -6.65% in 2020, and recovered to 5.33% in 2021. The adjusted ROA remained positive throughout, though trending downward from 6.19% in 2017 to 5.91% in 2020, with a rebound to 7.15% in 2021. This implies that operational asset profitability was impacted in 2020 but improved subsequently when adjustments are considered.

Net Sales

Net sales increased steadily from 2017 to 2019, rising from approximately 13.8 billion to nearly 14.9 billion US dollars. However, there was a noticeable decline in 2020 to about 11.8 billion, followed by a partial recovery in 2021 to around 12.7 billion US dollars. This pattern suggests an impact on sales in 2020, likely due to external factors, with some rebound in the following year.

Total Assets

Total assets remained relatively stable between 2017 and 2019, fluctuating slightly around 20 to 20.9 billion US dollars. There was a significant reduction in 2020 to approximately 18.1 billion US dollars, after which total assets rebounded sharply in 2021 to about 21.2 billion US dollars, exceeding previous levels. This indicates a possible strategic asset management or acquisition activity post-2020.

Reported Total Asset Turnover

The reported total asset turnover ratio experienced a gradual increase from 0.69 in 2017 to a peak of 0.73 in 2018, then slightly declined to 0.71 in 2019. A more pronounced decrease occurred in 2020, falling to 0.65, followed by a further reduction to 0.6 in 2021. This declining trend in asset turnover after 2018 indicates reduced efficiency in using assets to generate sales, especially after 2019.

Adjusted Total Assets

Adjusted total assets followed a similar pattern to total assets, remaining steady around 20.4 to 20.8 billion US dollars from 2017 through 2019, then declining markedly to about 18.0 billion US dollars in 2020. The figure rebounded in 2021 to approximately 21.3 billion US dollars, surpassing earlier years, consistent with the trend observed in total assets.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio increased slightly from 0.68 in 2017 to 0.72 in 2019, indicating improved efficiency in asset use during this period. However, a drop to 0.65 occurred in 2020, followed by a further decline to 0.6 in 2021. This decline aligns with the reported asset turnover trend, suggesting reduced asset utilization efficiency after 2019.

Current Assets

Current assets showed a general upward trend from 2017 through 2020, increasing from approximately 4.6 billion USD to 5.1 billion USD. However, in 2021, there was a noticeable decline to about 4.7 billion USD, indicating a reduction in short-term asset availability after a four-year period of growth.

Current Liabilities

Current liabilities fluctuated within the observed period, initially rising from around 3.4 billion USD in 2017 to a peak above 3.6 billion USD in 2018. A downward shift occurred in 2020, with liabilities falling to approximately 2.9 billion USD, followed by a rebound in 2021 reaching about 3.55 billion USD. This variability suggests periods of changing short-term obligations management.

Reported Current Ratio

The reported current ratio remained relatively stable between 2017 and 2019 in the range of 1.27 to 1.34. There was a significant increase in 2020 to 1.75, indicating strengthened liquidity, but this ratio retreated to 1.32 in 2021, aligning closely with pre-2020 levels. This pattern reflects a temporary improvement in the company’s ability to cover short-term liabilities with current assets during 2020.

Adjusted Current Assets

The adjusted current assets mirrored the trend in reported current assets, rising steadily from 2017 to 2020, peaking at about 5.2 billion USD before decreasing to roughly 4.85 billion USD in 2021. The adjusted figures were consistently marginally higher than the reported values, indicating adjustments added moderate asset values.

Adjusted Current Liabilities

Adjusted current liabilities exhibited a similar trend to reported liabilities, rising from 2017 through 2018 and then declining in 2020. The lowest point was around 2.83 billion USD in 2020, followed by an increase to approximately 3.51 billion USD in 2021. The adjustments consistently resulted in somewhat lower liabilities than the reported figures.

Adjusted Current Ratio

The adjusted current ratio followed the same overall pattern as the reported ratio, with a steady range from 2017 to 2019 (approximately 1.31 to 1.39), a pronounced peak in 2020 at 1.84, and a reversion to 1.38 in 2021. The adjusted ratio was slightly higher than the reported ratio each year, suggesting the adjustments enhance the perceived liquidity position.

Summary Insights

The data indicate that liquidity improved markedly in 2020, as seen in both reported and adjusted current ratios, driven primarily by a rise in current assets and a decline in current liabilities. However, this was followed by a contraction in liquidity in 2021, with asset reductions and liability increases lowering the current ratios near earlier levels. The adjustments made to assets and liabilities consistently reflect a slightly stronger liquidity position than reported figures alone. Overall, the company's short-term financial position experienced volatility but remained stable across the five-year period with temporary enhancement in 2020.

The financial data reveals several notable trends regarding the company's debt and equity positions over the five-year period ending in 2021.

Total Debt

Total debt decreased steadily from 2017 through 2019, moving from approximately 7.32 billion US dollars to 6.35 billion. However, this trend reversed in subsequent years, with debt increasing to about 6.69 billion in 2020 and sharply rising to approximately 8.76 billion by the end of 2021.

Total Shareholders’ Equity

Shareholders’ equity demonstrated an overall upward trend from 2017 to 2019, growing from roughly 7.62 billion to 8.69 billion US dollars. This was followed by a significant decline in 2020 down to around 6.17 billion, before a moderate recovery to 7.22 billion in 2021. The sizable dip in 2020 suggests notable events impacting equity during that year.

Reported Debt to Equity Ratio

The reported debt to equity ratio showed a general decline from 0.96 in 2017 to a low of 0.73 in 2019, indicating improved leverage and financial stability during this period. However, this ratio increased substantially thereafter, reaching 1.08 in 2020 and further climbing to 1.21 in 2021, signaling higher leverage and a potentially increased risk profile.

Adjusted Total Debt and Equity

Adjusted total debt follows a similar pattern to reported debt, with a decrease between 2017 and 2019 and a subsequent rise through 2021, culminating at approximately 9.16 billion US dollars. Adjusted total equity also mirrors the reported equity trend, increasing initially and then declining sharply in 2020 with a partial rebound in 2021 to about 7.96 billion. This consistency between reported and adjusted figures affirms the robustness of the trends observed.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio closely parallels the reported ratio, decreasing to 0.73 in 2019 before increasing significantly to 1.06 in 2020 and 1.15 in 2021. This shift underscores the change in capital structure towards greater reliance on debt financing in the most recent years.

In summary, the data indicates that the company experienced a period of deleveraging and strengthening equity from 2017 through 2019, followed by a reversal characterized by increased debt levels and decreased equity in 2020, partly recovering in equity but with debt continuing to rise sharply in 2021. The resulting higher debt to equity ratios suggest a shift towards a more leveraged financial structure, which may affect the company’s risk and financial flexibility going forward.

Total Debt

The total debt exhibited a general decline from 2017 through 2019, decreasing from 7.32 billion USD to approximately 6.35 billion USD. However, from 2019 onwards, there was an increase in total debt, reaching 8.76 billion USD by the end of 2021, indicating a rising leverage position in recent years.

Total Capital

Total capital remained relatively stable around 15 billion USD during the period from 2017 to 2019, with a modest decline to 12.85 billion USD in 2020 before increasing significantly to nearly 16 billion USD in 2021. This suggests variability in capital structure, with a notable drop in 2020 followed by recovery and growth.

Reported Debt to Capital Ratio

The reported debt to capital ratio decreased steadily from 0.49 in 2017 to 0.42 in 2019, reflecting a reduction in leverage. In contrast, from 2020 onwards, this ratio increased, reaching 0.55 by 2021, indicating a higher proportion of debt relative to total capital in the later years.

Adjusted Total Debt

Adjusted total debt followed a similar trend as reported total debt, decreasing from around 7.88 billion USD in 2017 to 6.93 billion USD in 2019, then increasing steadily to 9.16 billion USD by 2021. This adjustment confirms the rising debt levels in the more recent years after a period of decline.

Adjusted Total Capital

Adjusted total capital mirrored the pattern of reported total capital, with values remaining relatively consistent between approximately 16.18 billion USD in 2017 and 16.41 billion USD in 2019, dropping to 13.82 billion USD in 2020, and subsequently increasing to 17.12 billion USD in 2021. This shows a similar dynamic in capital base fluctuations as observed with the reported figures.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio decreased from 0.49 in 2017 to 0.42 in 2019, indicating reduced leverage. After 2019, the ratio increased to 0.53 in 2021, demonstrating a gradual return to higher leverage levels. This movement aligns with the trends seen in adjusted debt and adjusted capital values.

Total Assets

The total assets gradually increased from 19,962,400 thousand US dollars in 2017 to 20,874,100 thousand US dollars in 2019, indicating moderate growth. However, a noticeable decline occurred in 2020, dropping to 18,126,000 thousand US dollars, followed by a recovery in 2021 to 21,206,400 thousand US dollars, the highest value in the observed period.

Total Ecolab Shareholders’ Equity

Shareholders' equity followed an overall upward trend from 7,618,500 thousand US dollars in 2017 to 8,685,300 thousand US dollars in 2019. In 2020, there was a sharp decrease to 6,166,500 thousand US dollars, before partially recovering to 7,224,200 thousand US dollars in 2021. This fluctuation suggests significant equity adjustments or losses in 2020.

Reported Financial Leverage

The reported financial leverage ratio steadily declined from 2.62 in 2017 to 2.40 in 2019, reflecting a reduction in the relative debt level. However, it reversed course in 2020, rising sharply to 2.94 and maintaining this elevated level into 2021. This increase indicates higher leverage and potentially greater financial risk during these years.

Adjusted Total Assets

Adjusted total assets mirror the trend seen in total assets, increasing slightly from approximately 20,451,778 thousand US dollars in 2017 to 20,766,200 thousand US dollars in 2019, followed by a decrease to 18,046,800 thousand US dollars in 2020, and a rebound to 21,253,500 thousand US dollars in 2021. The adjusted figures confirm the decline and recovery pattern observed in the unadjusted data.

Adjusted Total Equity

Adjusted total equity showed continuous growth from 8,309,300 thousand US dollars in 2017 to 9,475,000 thousand US dollars in 2019 before declining sharply to 6,708,600 thousand US dollars in 2020, then increasing again to 7,964,600 thousand US dollars in 2021. This pattern highlights a significant equity reduction in 2020, followed by a partial restoration.

Adjusted Financial Leverage

The adjusted financial leverage decreased from 2.46 in 2017 to 2.19 in 2019, indicating improving leverage ratios. In 2020, it increased substantially to 2.69 and slightly decreased to 2.67 in 2021. This trend parallels the reported leverage, pointing to heightened leverage and financial exposure starting in 2020.

The financial data indicate several notable trends over the five-year period examined. Net sales experienced overall growth from 2017 to 2019, rising from approximately $13.8 billion to around $14.9 billion. However, a sharp decline occurred in 2020, with net sales dropping to approximately $11.8 billion, followed by a moderate recovery to roughly $12.7 billion in 2021. This pattern suggests a significant impact on sales during 2020, with partial rebound thereafter.

Net income attributable to the company showed fluctuations aligned with sales trends but with greater volatility. From 2017 to 2019, net income increased gradually from about $1.51 billion to $1.56 billion, then sharply turned negative in 2020, registering a loss of approximately $1.21 billion. The subsequent year, 2021, showed a return to profitability with net income reaching nearly $1.13 billion. This indicates a severe disruption in 2020 impacting profitability, with recovery efforts visible in 2021.

The reported net profit margin followed a similar trajectory, decreasing from 10.9% in 2017 to 9.74% in 2018, then slightly rising to 10.46% in 2019. In 2020, the margin turned negative at -10.22%, reflecting the net loss for that year before improving to 8.87% in 2021. This margin behavior highlights the significant operational or market challenges during 2020 that substantially reduced profitability ratios.

Adjusted net income, which includes noncontrolling interests and potentially excludes certain one-time items, displayed a somewhat different pattern. It increased from approximately $1.27 billion in 2017 to $1.46 billion in 2018 but then declined to about $1.3 billion in 2019 and further to around $1.07 billion in 2020. Unlike the reported figures, the adjusted net income remained positive in 2020, indicating that adjustments may have excluded the losses that led to the reported negative net income. By 2021, adjusted net income increased notably to approximately $1.52 billion, surpassing levels from earlier years.

The adjusted net profit margin figures support this observation. Margins moved from 9.15% in 2017 up to 9.96% in 2018, dropping to 8.7% in 2019 but remaining positive through 2020 at 9.04%, and then rising significantly to 11.94% in 2021. This improvement in adjusted margins by 2021 signifies stronger profitability when factoring out certain nonrecurring or exceptional items, and it suggests operational improvements or favorable conditions leading to enhanced profitability.

Overall, the data reveal a period of steady growth and profitability until 2019, followed by a pronounced downturn in 2020 across most financial metrics, likely reflecting extraordinary challenges during that year. The recovery pattern in 2021 is marked by improved sales, a return to net income profitability, and stronger adjusted profit margins, indicating resilience and effective management responses to prior adverse conditions.

The financial data reveals several notable trends in the company's profitability and equity structure from 2017 through 2021.

Net Income (Loss) Attributable to the Company

The net income remained positive and relatively stable from 2017 to 2019, fluctuating between approximately 1.43 billion and 1.56 billion US dollars. However, there was a significant decline in 2020, with the company reporting a substantial loss of about 1.21 billion US dollars. This negative result was followed by a recovery in 2021, with net income returning to positive territory at around 1.13 billion US dollars.

Total Shareholders’ Equity

Shareholders’ equity showed an increasing trend from 2017 through 2019, rising from about 7.62 billion to 8.69 billion US dollars. A notable contraction occurred in 2020, when equity decreased sharply to approximately 6.17 billion US dollars. In 2021, equity improved again to roughly 7.22 billion US dollars, but did not reach the previous peak levels seen in 2019.

Reported Return on Equity (ROE)

The reported ROE followed a pattern similar to net income, with values declining from 19.8% in 2017 to 17.86% in 2018 and remaining steady just under 18% in 2019. It then dropped sharply to a negative 19.54% in 2020, reflecting the net loss during this period. In 2021, the ROE rebounded to a positive 15.64%, though it did not return to the higher pre-pandemic levels.

Adjusted Net Income (Loss) Including Noncontrolling Interest

The adjusted net income shows less volatility than the reported net income. It increased from approximately 1.27 billion US dollars in 2017 to a peak of about 1.46 billion in 2018, fell to around 1.30 billion in 2019, then decreased further to 1.07 billion in 2020. In 2021, the adjusted net income rose significantly to 1.52 billion US dollars, surpassing prior years.

Adjusted Total Equity

Adjusted total equity also increased steadily from 8.31 billion US dollars in 2017 to 9.48 billion in 2019, followed by a marked decline to 6.71 billion in 2020. The figure improved to about 7.96 billion in 2021, indicating partial recovery but remaining below the highest point of 2019.

Adjusted Return on Equity (Adjusted ROE)

The adjusted ROE was initially in the mid-teens, increasing from 15.23% in 2017 to 16.5% in 2018. It then declined to 13.69% in 2019, before rebounding to 15.89% in 2020 despite the challenging market environment. The adjusted ROE reached its highest value of the period, 19.08%, in 2021, suggesting improved profitability on an adjusted basis during the most recent year.

Overall, the company experienced a period of growth in equity and profitability through 2019, followed by significant financial challenges in 2020 likely related to external market disruptions. The financial indicators show recovery during 2021, with adjusted profitability measures in particular indicating a stronger performance than reported figures alone might suggest. The divergence between reported and adjusted metrics highlights the impact of nonrecurring or noncontrolling interests during this period.

Net Income (Loss) Attributable to Ecolab

The net income showed an overall positive trend from 2017 through 2019, increasing from approximately 1.51 billion USD in 2017 to about 1.56 billion USD in 2019. However, a significant decline occurred in 2020, resulting in a net loss of approximately 1.21 billion USD. This loss was followed by a recovery in 2021, with net income returning to a positive figure of approximately 1.13 billion USD.

Total Assets

Total assets remained relatively stable from 2017 to 2019, with a slight upward movement from about 19.96 billion USD to 20.87 billion USD. In 2020, assets decreased notably to around 18.13 billion USD, then rebounded strongly in 2021 to approximately 21.21 billion USD, reaching the highest level in the period analyzed.

Reported Return on Assets (ROA)

Reported ROA followed a similar pattern to net income, starting at 7.56% in 2017, decreasing slightly to 7.12% and 7.47% in the next two years, then turning negative to -6.65% in 2020. The ROA improved in 2021 but remained below the initial levels at 5.33%.

Adjusted Net Income (Loss) Including Noncontrolling Interest

The adjusted net income data reveals a slightly different perspective, beginning at approximately 1.27 billion USD in 2017, peaking at about 1.46 billion USD in 2018, before a decline to 1.30 billion USD in 2019 and further down to 1.07 billion USD in 2020. A strong recovery occurred in 2021, with adjusted net income reaching a new high of around 1.52 billion USD.

Adjusted Total Assets

The adjusted total assets followed trends similar to the unadjusted assets, starting near 20.45 billion USD in 2017, increasing slightly in 2018 and 2019, then dropping in 2020 to approximately 18.05 billion USD, and rising again in 2021 to about 21.25 billion USD.

Adjusted Return on Assets (ROA)

The adjusted ROA showed more stability compared to the reported ROA. It began at 6.19% in 2017, rose to 7.09% in 2018, then declined to 6.24% and 5.91% in 2019 and 2020 respectively, followed by a significant rebound to 7.15% in 2021, exceeding the levels seen in several prior years.

Summary

The data indicates that the company experienced steady financial performance from 2017 to 2019, with positive net income and returns on assets. The year 2020 was marked by a pronounced downturn, including a substantial net loss and decline in asset base and profitability metrics. The subsequent year, 2021, demonstrated a notable recovery across all key financial indicators, with adjusted figures particularly suggesting improved operational results. The adjusted return on assets highlights resilient profitability trends despite fluctuations in reported figures, suggesting that adjustments provide valuable insight into underlying performance.