McKesson Corp. (NYSE:MCK)

Gross Profit Margin

The gross profit margin exhibited a generally upward trend from 2011 to 2015, rising from 5.33% to a peak of 6.37%. However, it slightly declined to 5.98% in 2016. This indicates an improvement in the company's efficiency in generating revenue relative to the cost of goods sold over most of the period, with a minor setback in the final year.

Operating Profit Margin

The operating profit margin showed variability but an overall gradual increase across the years under review. Starting at 1.62% in 2011, it reached 1.89% in 2013 before dipping to 1.66% in 2015, then recovering to 1.86% in 2016. This suggests fluctuating operating efficiency, with signs of stabilization and slight improvement by the end of the period.

Net Profit Margin

The net profit margin demonstrated a mixed pattern. It increased marginally from 1.07% in 2011 to 1.14% in 2012, then declined steadily to a low of 0.82% by 2015. In 2016, the margin rebounded strongly to 1.18%, surpassing the earlier highs. This volatility may reflect variations in non-operating items, tax impacts, or other financial activities affecting the bottom line.

Return on Equity (ROE)

Return on equity showed notable fluctuation, rising from 16.65% in 2011 to 20.54% in 2012, then declining to 14.82% in 2014. After 2014, it increased sharply, reaching 25.3% in 2016, the highest level in the period. This indicates an overall improvement in generating shareholder value, especially significant in the latter years.

Return on Assets (ROA)

The return on assets followed a variable trend, starting at 3.89% in 2011 and peaking slightly at 4.24% in 2012. It then declined to 2.44% in 2014, before recovering to 3.99% in 2016. This pattern suggests fluctuations in the efficiency with which the company utilized its assets to generate profits, with a recovery toward the end of the period.

The financial data over the six-year period reveals several notable trends in key profitability metrics.

Gross Profit

The gross profit demonstrates a consistent upward trajectory from 2011 through 2016. Starting at $5,970 million in 2011, it increases steadily each year, reaching $11,416 million in 2016. This represents nearly a doubling of gross profit over the period, indicating enhanced core earnings performance.

Revenues

Revenues follow a similar increasing pattern, growing from $112,084 million in 2011 to $190,884 million in 2016. The revenue growth is continuous and substantial, showing an approximate 70% increase over six years. This growth in top-line indicates expanding sales or operational scale.

Gross Profit Margin

The gross profit margin percentage shows improvement from 5.33% in 2011 to a peak of 6.37% in 2015. This suggests an improving efficiency or pricing power relative to cost of goods sold. However, in 2016, the margin slightly declines to 5.98%, indicating a marginal reduction in profitability relative to revenues. Despite this dip, the 2016 margin remains above the levels seen through 2013.

Overall, the data points to strong revenue and gross profit growth during the years observed, along with improved profitability margins that plateau towards the end of the period. This combination signifies positive operational performance and profitable growth. The slight margin decrease in the final year warrants attention but does not negate the overall upward trend. The company appears to have expanded its scale successfully while managing to enhance its cost efficiency over most of the period.

Over the six-year period, the company exhibited a consistent increase in operating income, indicating improving profitability from core operations. The operating income rose from 1,821 million US dollars in 2011 to 3,545 million US dollars in 2016, nearly doubling in value.

Revenues showed a general upward trend as well, expanding from 112,084 million US dollars in 2011 to 190,884 million US dollars in 2016. Although there was a slight dip in 2013 compared to 2012, the overall revenue progression remained positive and substantial, particularly noticeable between 2014 and 2015.

The operating profit margin fluctuated modestly throughout the period, beginning at 1.62% in 2011 and ending at 1.86% in 2016. The margin peaked in 2013 at 1.89%, declined in the subsequent years until 2015, and then recovered somewhat by 2016. This indicates that while the company increased its profitability in absolute terms, the efficiency of converting revenues to operating income experienced some variability.

Operating Income

Displayed a strong, continuous upward trend, nearly doubling over the six years.

Revenues

Generally increased with a minor decrease in 2013, significant growth from 2014 onwards, reflecting expanding market activity or sales volume.

Operating Profit Margin

Exhibited minor fluctuations, maintaining a narrow range between 1.62% and 1.89%, suggesting relative stability in operational efficiency but with some variability impacting margin performance.

Net Income Trend

The net income attributable to the company showed a general upward trend over the six-year period. Starting from $1,202 million in 2011, it increased steadily to $1,403 million in 2012. There was a slight dip in 2013 and 2014, with values of $1,338 million and $1,263 million respectively. However, this was followed by a substantial rise in 2015 and an even more significant increase in 2016, reaching $1,476 million and $2,258 million respectively, indicating strong income growth in the latter years.

Revenue Development

Revenues also demonstrated a consistent growth pattern from 2011 through 2016. Beginning at $112,084 million, revenues increased each year, reaching $122,734 million in 2012 and maintaining steady levels around $122,455 million in 2013 before advancing further. Notably, 2014 saw a stronger increase to $137,609 million, followed by a more marked growth in 2015 to $179,045 million and a subsequent rise to $190,884 million in 2016. This steady revenue expansion suggests effective sales growth and possibly broadening market reach.

Net Profit Margin Fluctuations

The net profit margin exhibited variability throughout the period. It started at 1.07% in 2011 and increased slightly to 1.14% in 2012, before decreasing to 1.09% in 2013 and falling more notably to 0.92% in 2014. The margin decreased further to its lowest point at 0.82% in 2015, before rebounding to 1.18% in 2016, the highest margin observed in the period. This pattern suggests fluctuations in profitability efficiency, with improvements in the latest year possibly resulting from better cost control or enhanced operational efficiency.

Overall Financial Performance Insights

The data reflects positive financial growth overall, with revenues and net income both increasing significantly over the six years. Despite fluctuations in net profit margin, the marked increase in net income in 2016 points to improved profitability. The earlier margin declines may warrant further examination to identify cost pressures or competitive challenges faced during those years. The strong revenue growth alongside rising net income in the final years indicates the firm was successful in converting sales growth into lower-level earnings gains, improving its financial health by the end of the period analyzed.

Net Income Attributable to McKesson Corporation

The net income exhibits a fluctuating but generally upward trend over the six-year period. Starting at 1,202 million USD in 2011, the figure increased to 1,403 million USD in 2012, followed by a slight decline to 1,338 million USD in 2013 and 1,263 million USD in 2014. Subsequently, it rose significantly to 1,476 million USD in 2015 and then surged to 2,258 million USD in 2016, indicating a notable improvement in profitability in the later years.

Total McKesson Corporation Stockholders’ Equity

The stockholders’ equity shows some volatility but maintains a generally positive trajectory. It decreased from 7,220 million USD in 2011 to 6,831 million USD in 2012. Thereafter, it experienced a recovery trend: 7,070 million USD in 2013, a substantial increase to 8,522 million USD in 2014, a slight decline to 8,001 million USD in 2015, and ultimately rising to 8,924 million USD by 2016. These movements suggest periods of equity adjustments or capital changes, with an overall enhancement in the company’s net worth by the end of the period.

Return on Equity (ROE)

The ROE reflects the company’s efficiency in generating profits from shareholders’ equity. After an initial rise from 16.65% in 2011 to 20.54% in 2012, the ratio decreased to 18.93% in 2013 and further to 14.82% in 2014. It then climbed to 18.45% in 2015 and reached its highest point at 25.3% in 2016. This pattern indicates variability in profitability effectiveness, with a notable peak in the final year, suggesting improved returns on equity during that period.

Net Income

The net income attributable to the company demonstrates an overall upward trend over the six-year period. Beginning at $1,202 million in 2011, it increased modestly to $1,403 million in 2012. A slight decline occurred in 2013 and 2014, falling to $1,338 million and $1,263 million respectively. However, the net income recovered significantly in 2015, reaching $1,476 million, with a strong surge to $2,258 million in 2016, marking the highest level in the observed timeframe.

Total Assets

Total assets increased steadily throughout the period, rising from $30,886 million in 2011 to $33,093 million in 2012 and $34,786 million in 2013. A substantial jump took place in 2014, with assets growing to $51,759 million, followed by further increases to $53,870 million in 2015 and $56,563 million in 2016. This pattern indicates significant asset growth, particularly from 2014 onwards.

Return on Assets (ROA)

The return on assets shows a degree of fluctuation over the years. Starting at 3.89% in 2011, it increased to 4.24% in 2012 before dipping to 3.85% in 2013. A notable decline is observed in 2014, where ROA fell to 2.44%, suggesting a period of reduced efficiency in generating net income from the asset base. The metric improved slightly to 2.74% in 2015 and exhibited a significant recovery in 2016, reaching 3.99%, the highest point since 2012.

Overall Insights

The data suggests a pattern of robust asset growth, particularly starting in 2014, which may have initially pressured profitability ratios as evidenced by the drop in ROA that year. Despite this, net income showed resilience and ultimately strong growth, especially in the last recorded year. The rebound in ROA in 2016 indicates improved asset utilization and profitability. The trends point to an organization that has been expanding its asset base considerably while managing to enhance earnings and efficiency over the longer term.