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Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities
Monsanto Co., adjustment to net income attributable to Monsanto Company
US$ in millions
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
- Reported Net Income Attributable to Monsanto Company
- The reported net income demonstrates a generally positive trend between 2012 and 2017, with an increase from 2045 million USD in 2012 to a peak of 2740 million USD in 2014. However, after 2014, there is a notable decline with net income dropping to 2314 million USD in 2015 and further decreasing to 1336 million USD in 2016. The income then recovers significantly in 2017, rising to 2260 million USD.
- Adjusted Net Income Attributable to Monsanto Company
- The adjusted net income closely mirrors the pattern observed in the reported net income, suggesting minimal impact from adjustments. It increases from 2050 million USD in 2012 to 2737 million USD in 2014, followed by a decline to 2311 million USD in 2015 and a further drop to 1335 million USD in 2016. It then increases markedly to 2260 million USD in 2017.
- Overall Insights
- The data highlights a strong growth phase from 2012 to 2014, followed by a period of significant decline over the subsequent two years, culminating in the lowest net income in 2016. The recovery observed in 2017 is substantial, though the level remains below the 2014 peak. The close alignment of reported and adjusted net income values throughout the period indicates that adjustments had little effect on reported profitability in these years.
Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)
Monsanto Co., adjusted profitability ratios
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
The financial performance indicators under review display notable trends over the six-year period ending August 31, 2017.
- Net Profit Margin
- The reported net profit margin demonstrates a generally stable pattern from 2012 to 2015, remaining within a narrow band around 15% to 17%. However, there is a significant decline in 2016, when the margin drops sharply to approximately 9.89%. In the following year, 2017, there is a recovery to about 15.44%, restoring the margin closer to earlier levels. The adjusted net profit margin closely follows the same pattern, indicating consistency between reported and adjusted metrics.
- Return on Equity (ROE)
- The reported ROE shows a marked upward trend from 2012 through 2014, peaking at 34.79% in 2014. Although there is a slight decline in 2015 and 2016, with returns decreasing to 33.1% and 29.47% respectively, the ROE rebounds to 35.1% in 2017, surpassing the previous peak. Adjusted ROE values are almost identical to reported values, confirming the reliability and stability of equity returns after adjustments.
- Return on Assets (ROA)
- The reported ROA follows a similar pattern to the net profit margin but with lower volatility. It rises steadily from 10.11% in 2012 to a peak of 12.47% in 2014. Afterward, a downturn occurs in 2015 and a pronounced dip in 2016 to 6.77% signals a period of decreased asset efficiency. By 2017, ROA improves significantly to 10.59%, nearing the earlier period levels. Adjusted ROA values mirror these trends closely, attesting to consistent asset performance metrics.
Overall, the data depicts strong profitability and efficiency metrics during the early to mid-2010s, a pronounced dip across profitability and asset returns in 2016, followed by a recovery in 2017. The close alignment between reported and adjusted figures suggests minimal impact from extraordinary items or accounting adjustments, highlighting underlying operational consistency.
Monsanto Co., Profitability Ratios: Reported vs. Adjusted
Adjusted Net Profit Margin
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
2017 Calculations
1 Net profit margin = 100 × Net income attributable to Monsanto Company ÷ Net sales
= 100 × ÷ =
2 Adjusted net profit margin = 100 × Adjusted net income attributable to Monsanto Company ÷ Net sales
= 100 × ÷ =
The financial data reveals several noteworthy trends regarding profitability over the six-year period analyzed.
- Net Income Performance
- Both reported and adjusted net income attributable to the company exhibited an overall increasing trend from 2012 through 2014, reaching a peak in 2014. Specifically, net income rose from approximately 2,045 million US dollars in 2012 to about 2,740 million US dollars in 2014. However, this upward movement was followed by a decline in 2015 and a more pronounced drop in 2016, where net income fell to its lowest point in the period, around 1,336 million US dollars. In 2017, net income rebounded significantly to approximately 2,260 million US dollars, indicating recovery but still below the 2014 peak levels.
- Net Profit Margin Trends
- The reported and adjusted net profit margins closely mirror each other, displaying almost identical percentages across all years. Initially, the margins increased steadily from 15.14% in 2012 to a high of 17.28% in 2014. Following this peak, there was a sharp decline, dropping to 9.89% in 2016, which is the lowest margin recorded in the period. By 2017, the margin improved again to approximately 15.44%, suggesting a recovery trend but not quite reaching the earlier highs.
- Consistency Between Reported and Adjusted Figures
- The closeness of the reported and adjusted values for both net income and net profit margin suggests minimal discrepancies due to adjustments during the period. This consistency indicates that unusual or non-recurring items had a limited effect on overall profitability metrics, allowing for clearer year-to-year comparisons.
In summary, the company experienced solid profitability growth up to 2014, followed by a period of contraction peaking in 2016, and a partial recovery in 2017. The pattern in profit margins aligns closely with net income movements, reflecting fluctuations in overall profitability that may be attributable to operational challenges or market conditions within the mid-period years.
Adjusted Return on Equity (ROE)
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
2017 Calculations
1 ROE = 100 × Net income attributable to Monsanto Company ÷ Total Monsanto Company shareowners’ equity
= 100 × ÷ =
2 Adjusted ROE = 100 × Adjusted net income attributable to Monsanto Company ÷ Total Monsanto Company shareowners’ equity
= 100 × ÷ =
The financial data reveal several key trends in net income and return on equity (ROE) for the analyzed periods. Both reported and adjusted net income figures demonstrate similar patterns, with a peak in 2014 followed by a decline and a subsequent partial recovery by 2017.
- Net Income Trends
- Net income attributable to the company increased steadily from 2012 to 2014, reaching a high point of approximately 2,740 million US dollars in 2014. This was followed by a notable decrease in 2015 and a more significant drop in 2016, when net income fell to around 1,336 million US dollars. In 2017, net income rebounded strongly to approximately 2,260 million US dollars, though it did not reach the 2014 peak level.
- Return on Equity (ROE) Trends
- Both reported and adjusted ROE show consistency in values and closely mirror each other. The ROE rose from approximately 17.3% in 2012 to a peak exceeding 34% in 2014, maintaining a high level above 33% in 2015. In 2016, ROE declined to roughly 29.5%, before increasing again to 35.1% in 2017, surpassing the previous peaks.
- Correlation Between Metrics
- The parallel movements in net income and ROE suggest an underlying relationship between profitability and equity returns. The substantial increase in net income and ROE up to 2014 indicates effective management of resources during that period, while the declines in 2015 and 2016 suggest challenges or adverse conditions impacting profitability. The recovery observed in 2017 points to improved performance or operational adjustments that enhanced both net income and ROE.
- Adjusted Versus Reported Figures
- The minimal differences between reported and adjusted figures for both net income and ROE indicate that adjustments had a negligible impact on the overall financial results, presenting a consistent view of the company’s financial health over the analyzed periods.
Adjusted Return on Assets (ROA)
Based on: 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31), 10-K (reporting date: 2013-08-31), 10-K (reporting date: 2012-08-31).
2017 Calculations
1 ROA = 100 × Net income attributable to Monsanto Company ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Adjusted net income attributable to Monsanto Company ÷ Total assets
= 100 × ÷ =
The analysis of the financial data over the six-year period reveals notable trends in net income and return on assets (ROA) for the company.
- Net Income Trends
- Reported net income exhibited an upward trajectory from 2012 to 2014, rising from 2,045 million US dollars to a peak of 2,740 million US dollars in 2014. Subsequently, there was a decline to 2,314 million in 2015, followed by a more pronounced drop to 1,336 million in 2016. In 2017, net income recovered significantly to 2,260 million US dollars.
- The adjusted net income mirrored this pattern closely, indicating minimal difference between reported and adjusted figures and reflecting consistent earnings quality with similar fluctuations over the period.
- Return on Assets (ROA) Trends
- Both reported and adjusted ROA followed nearly identical patterns, confirming stability in asset utilization metrics relative to the reported profitability. The ROA increased from approximately 10.11% in 2012 to a peak of around 12.47% in 2014. This was followed by a decline to 10.56% in 2015 and a more substantial fall to 6.77% in 2016. By 2017, ROA rebounded to approximately 10.59%, approaching earlier performance levels.
- Insights
- The synchronization between reported and adjusted measures for both net income and ROA suggests consistent accounting practices or minimal non-recurring adjustments impacting these metrics during the examined timeframe.
- The sharp decrease in 2016 across both net income and ROA indicates a period of operational or market challenges, with a recovery observed in 2017. This recovery highlights a potential turnaround or improvement in the company’s financial performance after a difficult year.