Mosaic Co. (NYSE:MOS)

The financial data over the five-year period exhibits notable fluctuations in various profitability and expense metrics when expressed as a percentage of net sales.

Gross Margin and Cost of Goods Sold

Cost of goods sold consistently represents a significant portion of net sales, though it notably decreased from -88.63% in 2017 to -74.1% in 2021, indicating improved cost efficiency. Correspondingly, gross margin improved markedly, rising from 11.37% in 2017 to 25.9% in 2021 after some volatility, reflecting enhanced profitability at the gross level.

Selling, General and Administrative Expenses (SG&A)

SG&A expenses as a percentage of net sales remained relatively stable, fluctuating slightly between -4.28% and -3.48%, suggesting disciplined control over operating costs in this category throughout the period.

Impairment, Restructuring and Other Expenses

There were significant impairment and restructuring charges recorded in 2019 (-16.42%), which adversely impacted the operating earnings in that year. These expenses were much lower or absent in other years.

Operating Earnings

Operating earnings showed considerable volatility, with a notable loss of -12.29% in 2019 coinciding with high impairment expenses, followed by recovery to 19.98% in 2021. This indicates a strong rebound in operating profitability post-2019.

Interest Income and Expense

Interest income remained low but relatively stable across the years, while interest expenses decreased from -2.31% in 2017 to -1.57% in 2021. Net interest expense followed a similar downward trend, indicating improved net finance costs over the period.

Foreign Currency Transaction and Other Income/Expenses

Foreign currency transaction gains and losses were volatile, with negative impacts in 2018, 2020, and 2021, albeit at relatively small percentages. Other income/expenses were minimal and mostly negligible in their effect on profits.

Earnings Before Income Taxes

Earnings before income taxes mirrored operating earnings trends, with a loss of -14.1% in 2019 and a significant recovery to 18% in 2021, again highlighting the effect of the unusual impairment charge and subsequent operational improvement.

Provision for Income Taxes

The tax provision showed notable variability, swinging from a benefit as high as -6.68% in 2017, to a charge of 6.66% in 2020, and back to a significant tax benefit of -4.84% in 2021. This variability suggests shifting tax positions or effective tax rates impacting net earnings.

Net Earnings

Net earnings attributable to the company displayed considerable fluctuation, with a small loss in 2017 followed by positive earnings in 2018, a sharp loss in 2019 (-11.98%), and a strong recovery to 13.2% in 2021. This pattern aligns with operating performance and exceptional items over the period.

Equity in Net Earnings of Nonconsolidated Companies

This component was minor relative to total earnings and fluctuated between small positive and negative values without a clear trend.

In summary, the data exhibits a period of financial stress in 2019 driven by significant impairment charges, which led to negative operating and net earnings. Following this difficult year, the company demonstrated substantial improvement in operational efficiency and profitability, evidenced by reductions in cost of goods sold and interest expense ratios and a strong gross margin and net earnings recovery by 2021. Expense control in selling and administrative costs remained stable, contributing to improved operating margins over time. Tax provisions showed variability, potentially linked to changes in earnings profiles or tax strategies during the period. Overall, the company’s financial health improved considerably from 2019 onwards.