Return on Equity (ROE)
since 2005
Calculation
McKesson Corp., ROE, long-term trends, calculation
| ROE | = | 100 | × | Net income (loss) attributable to McKesson Corporation1 | ÷ | Total McKesson Corporation stockholders’ equity1 | |
|---|---|---|---|---|---|---|---|
| Mar 31, 2016 | 25.30% | = | 100 | × | 2,258) | ÷ | 8,924) |
| Mar 31, 2015 | 18.45% | = | 100 | × | 1,476) | ÷ | 8,001) |
| Mar 31, 2014 | 14.82% | = | 100 | × | 1,263) | ÷ | 8,522) |
| Mar 31, 2013 | 18.93% | = | 100 | × | 1,338) | ÷ | 7,070) |
| Mar 31, 2012 | 20.54% | = | 100 | × | 1,403) | ÷ | 6,831) |
| Mar 31, 2011 | 16.65% | = | 100 | × | 1,202) | ÷ | 7,220) |
| Mar 31, 2010 | 16.77% | = | 100 | × | 1,263) | ÷ | 7,532) |
| Mar 31, 2009 | 13.29% | = | 100 | × | 823) | ÷ | 6,193) |
| Mar 31, 2008 | 16.17% | = | 100 | × | 990) | ÷ | 6,121) |
| Mar 31, 2007 | 14.55% | = | 100 | × | 913) | ÷ | 6,273) |
| Mar 31, 2006 | 12.71% | = | 100 | × | 751) | ÷ | 5,907) |
| Mar 31, 2005 | -2.97% | = | 100 | × | (157) | ÷ | 5,275) |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31), 10-K (reporting date: 2010-03-31), 10-K (reporting date: 2009-03-31), 10-K (reporting date: 2008-03-31), 10-K (reporting date: 2007-03-31), 10-K (reporting date: 2006-03-31), 10-K (reporting date: 2005-03-31).
1 US$ in millions
The financial performance between 2005 and 2016 is characterized by a transition from initial instability to a period of sustained profitability and growth. After a net loss in 2005, the company entered a recovery phase that resulted in a significant expansion of net income and a substantial increase in the efficiency of shareholder equity utilization.
- Net Income Trends
- A sharp reversal in profitability occurred between 2005 and 2006, as the net loss of 157 million USD shifted to a net income of 751 million USD. This upward trajectory continued with relative consistency, reaching 1,476 million USD by 2015, before experiencing a sharp increase to 2,258 million USD in 2016.
- Equity Position
- Total stockholders' equity grew from 5,275 million USD in 2005 to 8,924 million USD in 2016. The growth was not linear, with periodic declines observed in 2008, 2012, and 2015, indicating fluctuations in retained earnings or capital allocation strategies during those periods.
- Return on Equity (ROE) Dynamics
- The ROE shifted from a negative 2.97% in 2005 to a peak of 25.30% in 2016. Following the initial recovery in 2006, the ratio remained largely stable between 12% and 17% for several years. A notable peak occurred in 2012 at 20.54%, followed by a temporary decline to 14.82% in 2014, before a strong acceleration concluded the period at the highest recorded level of 25.30%.
- Profitability Correlation
- The growth in ROE closely mirrored the growth in net income, though the ratio was influenced by the fluctuating equity base. The surge in ROE in 2016 was driven by the substantial increase in net income, which far outpaced the growth in total stockholders' equity for that fiscal year.
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Comparison to Competitors
McKesson Corp., ROE, long-term trends, comparison to competitors
| McKesson Corp. | Abbott Laboratories | Elevance Health Inc. | Intuitive Surgical Inc. | Medtronic PLC | UnitedHealth Group Inc. | |
|---|---|---|---|---|---|---|
| Mar 31, 2016 | 25.30% | 6.82% | 9.84% | 12.74% | 6.80% | 18.33% |
| Mar 31, 2015 | 18.45% | 20.85% | 11.11% | 13.63% | 5.03% | 17.18% |
| Mar 31, 2014 | 14.82% | 10.61% | 10.60% | 12.39% | 15.76% | 17.31% |
| Mar 31, 2013 | 18.93% | 10.23% | 10.05% | 19.16% | 18.57% | 17.50% |
| Mar 31, 2012 | 20.54% | 22.32% | 11.16% | 18.34% | 21.14% | 17.72% |
| Mar 31, 2011 | 16.65% | 19.35% | 11.36% | 18.71% | 19.39% | 18.17% |
| Mar 31, 2010 | 16.77% | 20.66% | 12.12% | 18.74% | 21.18% | 17.94% |
| Mar 31, 2009 | 13.29% | 25.14% | 19.09% | 15.13% | 16.88% | 16.19% |
| Mar 31, 2008 | 16.17% | 27.92% | 11.62% | 16.13% | 19.34% | 14.33% |
| Mar 31, 2007 | 14.55% | 20.28% | 14.55% | 16.26% | 25.53% | 23.20% |
| Mar 31, 2006 | 12.71% | 12.22% | 12.59% | 12.22% | 27.14% | 19.99% |
| Mar 31, 2005 | -2.97% | 23.39% | 9.86% | 21.27% | 17.26% | 18.61% |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31), 10-K (reporting date: 2010-03-31), 10-K (reporting date: 2009-03-31), 10-K (reporting date: 2008-03-31), 10-K (reporting date: 2007-03-31), 10-K (reporting date: 2006-03-31), 10-K (reporting date: 2005-03-31).
Comparison to Sector (Health Care Equipment & Services)
McKesson Corp., ROE, long-term trends, comparison to sector (health care equipment & services)
| McKesson Corp. | Health Care Equipment & Services | |
|---|---|---|
| Mar 31, 2016 | 25.30% | 10.70% |
| Mar 31, 2015 | 18.45% | 11.84% |
| Mar 31, 2014 | 14.82% | 13.81% |
| Mar 31, 2013 | 18.93% | 14.22% |
| Mar 31, 2012 | 20.54% | 17.99% |
| Mar 31, 2011 | 16.65% | 17.02% |
| Mar 31, 2010 | 16.77% | 17.62% |
| Mar 31, 2009 | 13.29% | 19.50% |
| Mar 31, 2008 | 16.17% | 17.63% |
| Mar 31, 2007 | 14.55% | 20.02% |
| Mar 31, 2006 | 12.71% | 16.70% |
| Mar 31, 2005 | -2.97% | 16.22% |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31), 10-K (reporting date: 2010-03-31), 10-K (reporting date: 2009-03-31), 10-K (reporting date: 2008-03-31), 10-K (reporting date: 2007-03-31), 10-K (reporting date: 2006-03-31), 10-K (reporting date: 2005-03-31).
Comparison to Industry (Health Care)
McKesson Corp., ROE, long-term trends, comparison to industry (health care)
| McKesson Corp. | Health Care | |
|---|---|---|
| Mar 31, 2016 | 25.30% | 18.53% |
| Mar 31, 2015 | 18.45% | 18.52% |
| Mar 31, 2014 | 14.82% | 19.17% |
| Mar 31, 2013 | 18.93% | 18.81% |
| Mar 31, 2012 | 20.54% | 18.20% |
| Mar 31, 2011 | 16.65% | 15.90% |
| Mar 31, 2010 | 16.77% | 14.85% |
| Mar 31, 2009 | 13.29% | 20.14% |
| Mar 31, 2008 | 16.17% | 20.29% |
| Mar 31, 2007 | 14.55% | 17.87% |
| Mar 31, 2006 | 12.71% | 20.49% |
| Mar 31, 2005 | -2.97% | 18.28% |
Based on: 10-K (reporting date: 2016-03-31), 10-K (reporting date: 2015-03-31), 10-K (reporting date: 2014-03-31), 10-K (reporting date: 2013-03-31), 10-K (reporting date: 2012-03-31), 10-K (reporting date: 2011-03-31), 10-K (reporting date: 2010-03-31), 10-K (reporting date: 2009-03-31), 10-K (reporting date: 2008-03-31), 10-K (reporting date: 2007-03-31), 10-K (reporting date: 2006-03-31), 10-K (reporting date: 2005-03-31).