Analysis of Geographic Areas
McKesson Corp. operates in 2 regions: United States and Foreign.
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- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Enterprise Value to EBITDA (EV/EBITDA)
- Net Profit Margin since 2005
- Debt to Equity since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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Area Asset Turnover
McKesson Corp., asset turnover by geographic area
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Foreign |
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).
The analysis of the annual geographic area asset turnover ratios reveals distinct trends between the United States and foreign operations over the six-year period ending in March 2016.
- United States Asset Turnover
- The ratio exhibits a generally stable pattern with some fluctuations. Starting at 113.31 in 2011, there is a noticeable increase to 117.89 in 2012, followed by a significant decline to 93.18 in 2013. Subsequently, the ratio recovers moderately to 98.26 in 2014 and continues to increase, reaching 112.18 in 2015, before slightly decreasing again to 105.5 in 2016. Overall, the asset turnover in the United States remained relatively high with some volatility, but it generally hovered around the low to mid-100 range confirming consistent asset utilization efficiency over the period.
- Foreign Asset Turnover
- The foreign asset turnover ratio follows a markedly different trajectory compared to the domestic figures. Beginning at 111.06 in 2011, the ratio rises slightly to 115.43 in 2012 before experiencing a sharp and steep decline to 87.69 in 2013. This downward trend continues dramatically, plunging to 15.56 in 2014, which represents a significant drop in asset turnover efficiency abroad. A modest recovery is observed in the last two years with the ratio increasing to 46.94 in 2015 and slightly reducing to 41.94 in 2016. Despite the improvement after 2014, the foreign asset turnover ratio remains substantially below the earlier levels, indicating challenges in asset utilization in overseas markets during this timeframe.
In summary, while the United States asset turnover ratio maintained a relatively strong and stable profile throughout the period, the foreign asset turnover ratio experienced a severe decline beginning in 2013, reaching a low point in 2014, and only partially rebounding thereafter. This contrast suggests differing operational efficiencies or external factors affecting asset management in domestic versus foreign sectors. The foreign operations' sharp drop and partial recovery should be further investigated to understand the underlying causes and to evaluate potential strategic adjustments.
Area Asset Turnover: United States
McKesson Corp.; United States; area asset turnover calculation
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property, plant and equipment, net | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
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).
1 2016 Calculation
Area asset turnover = Revenues ÷ Property, plant and equipment, net
= ÷ =
- Revenues
- The revenue figures demonstrate a consistent upward trend over the six-year period. Starting at approximately $102 billion in 2011, revenues increased steadily each year, reaching over $158 billion by 2016. The most notable growth occurred between 2014 and 2016, with revenues rising from approximately $122 billion to $158 billion, indicating a strong expansion in sales volume or pricing power within the United States geographic area.
- Property, Plant, and Equipment, Net
- The net value of property, plant, and equipment showed a steady increase from $901 million in 2011 to $1.5 billion in 2016. There is a clear upward trajectory, suggesting ongoing investment in fixed assets. The most significant increases occurred between 2012 and 2013, and again from 2015 to 2016. This pattern reflects either capacity expansion or modernization efforts to support revenue growth and operational efficiency over the period.
- Area Asset Turnover
- The asset turnover ratio experienced fluctuations over time. It began at a high level of 113.31 in 2011 and further increased slightly in 2012 to 117.89, indicating strong efficiency in generating revenue from assets at that time. However, a marked decline occurred in 2013 and 2014, dropping to 93.18 and 98.26 respectively, which may reflect increased asset investment not yet fully leveraged in revenue generation. The ratio improved again in 2015 to 112.18 but slightly declined to 105.5 in 2016. Overall, the ratio suggests fluctuating but relatively high efficiency in asset usage throughout the period, albeit with some volatility linked to changes in asset base and revenues.
Area Asset Turnover: Foreign
McKesson Corp.; Foreign; area asset turnover calculation
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | |
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Revenues | ||||||
| Property, plant and equipment, net | ||||||
| Area Activity Ratio | ||||||
| Area asset turnover1 | ||||||
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).
1 2016 Calculation
Area asset turnover = Revenues ÷ Property, plant and equipment, net
= ÷ =
- Revenues
- Revenues demonstrated a generally increasing trend from 2011 through 2016, with a notable exception. Starting at 9,995 million US dollars in 2011, revenues increased modestly to 10,504 million in 2012 and slightly declined to 10,172 million in 2013. Thereafter, a significant rise occurred in 2014, where revenues sharply increased to 15,183 million. The most pronounced growth was observed in 2015, when revenues surged to 36,235 million, before experiencing a decrease to 32,629 million in 2016. Despite this decrease, the level remained substantially higher than in the earlier years, indicating overall expansion in the foreign segment over the period.
- Property, Plant and Equipment, Net
- The net value of property, plant, and equipment remained relatively stable and low from 2011 to 2013, with values of 90, 91, and 116 million US dollars respectively. A significant increase was recorded in 2014, with the value rising sharply to 976 million. This elevated level then slightly decreased but stayed relatively stable at 772 million in 2015 and 778 million in 2016, indicating considerable capital investment or revaluation around 2014, followed by a plateau in subsequent years.
- Area Asset Turnover
- The area asset turnover ratio, a measure of how efficiently assets generate revenues, showed a substantial decline over the period. It began at a very high level of 111.06 in 2011, increased marginally to 115.43 in 2012, and then exhibited a sharp downward trend to 87.69 in 2013. This decline accelerated drastically in 2014, dropping to 15.56, followed by slight recoveries to 46.94 in 2015 and 41.94 in 2016. This pattern suggests that while revenues and asset values both increased, asset growth outpaced revenue generation, resulting in lower efficiency ratios in later years.
Revenues
McKesson Corp., revenues by geographic area
US$ in millions
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Foreign | ||||||
| Total |
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).
The annual revenue data reveals noteworthy trends in geographic revenue distribution over the six-year period ending March 31, 2016.
- United States Revenue
- Revenues in the United States show consistent growth throughout the period. Starting at approximately $102.1 billion in 2011, there is a steady annual increase culminating in $158.3 billion by 2016. This represents a compound increase of around 55% over the six years, indicating robust and stable expansion in the domestic market.
- Foreign Revenue
- Foreign revenues exhibit a different pattern. From 2011 to 2013, revenues are relatively flat, fluctuating slightly around $10 billion. However, in 2014 there is a pronounced surge to about $15.2 billion, followed by a dramatic increase in 2015 to $36.2 billion. In 2016, foreign revenues slightly decline to $32.6 billion but remain markedly higher than earlier years. This significant jump between 2013 and 2015 suggests an acquisition, market expansion, or other strategic moves affecting international revenue streams.
- Total Revenue
- Total revenues mirror the trends seen in the geographic segments. The steady growth in the U.S. segment coupled with the sharp increase in foreign revenue after 2013 results in total revenue increasing from roughly $112.1 billion in 2011 to nearly $190.9 billion in 2016. The largest increments occur between 2014 and 2015, driven largely by the foreign revenue increase. This indicates that growth was significantly bolstered by the company’s international operations in the latter part of the period.
Overall, the data highlights stable and steady growth domestically and substantial foreign market expansion beginning in 2014. The company’s increasing reliance on foreign revenues from 2014 onwards is a key driver of total revenue growth during the timeframe analyzed.
Property, plant and equipment, net
McKesson Corp., property, plant and equipment, net by geographic area
US$ in millions
| Mar 31, 2016 | Mar 31, 2015 | Mar 31, 2014 | Mar 31, 2013 | Mar 31, 2012 | Mar 31, 2011 | |
|---|---|---|---|---|---|---|
| United States | ||||||
| Foreign | ||||||
| Total |
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).
- United States Property, Plant and Equipment, Net
- There is a consistent upward trend in the net property, plant and equipment values in the United States over the six-year period. Starting at 901 million USD in the fiscal year ended March 31, 2011, values increased steadily each year, reaching 1,500 million USD by March 31, 2016. This reflects a cumulative increase of approximately 66.4%, indicating ongoing investment or appreciation in domestic assets.
- Foreign Property, Plant and Equipment, Net
- The foreign segment exhibits a different pattern. From 2011 to 2013, the values rose slightly from 90 million USD to 116 million USD. However, there was a significant jump in 2014 to 976 million USD, followed by a decline in subsequent years to 772 million USD in 2015 and a slight recovery to 778 million USD in 2016. The spike in 2014 likely reflects a one-time event such as a major acquisition or revaluation, while the fluctuations afterward suggest adjustments or disposals.
- Total Property, Plant and Equipment, Net
- The total net property, plant and equipment values mirror the combined trends of the United States and foreign segments. The total increased modestly from 991 million USD in 2011 to 1,321 million USD in 2013, before surging to 2,222 million USD in 2014, driven largely by the foreign assets. A dip to 2,045 million USD occurred in 2015, followed by a rebound to 2,278 million USD in 2016. Overall, the total reflects strong growth attributable mainly to foreign asset changes, alongside steady domestic increases.