Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Return on Sales
Return on Investment
Mosaic Co., profitability ratios
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
Profitability across the period from 2017 to 2021 is characterized by substantial volatility, marked by a severe cyclical downturn in 2019 followed by an aggressive expansion in margins and returns reaching a peak in 2021.
- Profit Margin Trends
- Gross profit margin remained relatively stable, fluctuating between 10.07% and 15.63% from 2017 through 2020, before experiencing a significant surge to 25.90% in 2021. Operating and net profit margins exhibited higher sensitivity, both collapsing into negative territory in 2019, with the operating margin reaching -12.29% and the net margin reaching -11.98%. A robust recovery ensued, with the net profit margin ascending to 13.20% by the end of 2021.
- Return Metrics
- Return on Equity (ROE) and Return on Assets (ROA) closely mirrored the trajectory of net profitability. Both metrics recorded negative values in 2017 and 2019, with ROE hitting a period low of -11.62% in 2019. By 2021, these ratios reached their highest levels in the analyzed period, with ROE climbing to 15.38% and ROA increasing to 7.40%.
- Operational Correlation
- The strong synchronization between operating profit margins and return ratios suggests that the volatility in shareholder and asset returns was primarily driven by fluctuations in core operational profitability. The sharp increase across all metrics in 2021 indicates a significant improvement in earnings efficiency and cost management relative to revenue.
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Gross Profit Margin
Mosaic Co., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Gross margin | 3,200,300) | 1,064,900) | 897,300) | 1,498,400) | 842,800) | |
| Net sales | 12,357,400) | 8,681,700) | 8,906,300) | 9,587,300) | 7,409,400) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 25.90% | 12.27% | 10.07% | 15.63% | 11.37% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Linde plc | 43.03% | — | — | — | — | |
| Sherwin-Williams Co. | 42.83% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Gross profit margin = 100 × Gross margin ÷ Net sales
= 100 × 3,200,300 ÷ 12,357,400 = 25.90%
2 Click competitor name to see calculations.
The analysis of profitability metrics between 2017 and 2021 reveals a period of significant volatility followed by an exponential increase in both top-line revenue and operational efficiency.
- Net Sales Performance
- Net sales exhibited a fluctuating trajectory, increasing from 7.41 billion in 2017 to 9.59 billion in 2018, followed by a two-year contraction that reached a low of 8.68 billion in 2020. This trend was reversed in 2021, with sales surging to 12.36 billion, marking the highest revenue level in the analyzed period.
- Gross Margin Evolution
- Gross margin followed a pattern of instability, peaking initially in 2018 at 1.50 billion before dropping to 897.3 million in 2019. A recovery began in 2020, culminating in a substantial increase to 3.20 billion in 2021, indicating a sharp rise in the absolute dollar amount of profit retained after the cost of goods sold.
- Gross Profit Margin Ratio
- The gross profit margin percentage demonstrated notable variability. After rising to 15.63% in 2018, the ratio contracted to its period low of 10.07% in 2019. A moderate recovery to 12.27% occurred in 2020, followed by a dramatic expansion to 25.90% in 2021. The magnitude of this final increase suggests a significant improvement in pricing power or a substantial reduction in relative production costs during the 2021 fiscal year.
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Operating Profit Margin
Mosaic Co., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Operating earnings (loss) | 2,468,500) | 412,900) | (1,094,900) | 928,300) | 465,700) | |
| Net sales | 12,357,400) | 8,681,700) | 8,906,300) | 9,587,300) | 7,409,400) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 19.98% | 4.76% | -12.29% | 9.68% | 6.29% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Linde plc | 16.19% | — | — | — | — | |
| Sherwin-Williams Co. | 12.83% | — | — | — | — | |
| Operating Profit Margin, Sector | ||||||
| Chemicals | 14.87% | — | — | — | — | |
| Operating Profit Margin, Industry | ||||||
| Materials | 21.62% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Operating profit margin = 100 × Operating earnings (loss) ÷ Net sales
= 100 × 2,468,500 ÷ 12,357,400 = 19.98%
2 Click competitor name to see calculations.
The operating performance from 2017 to 2021 is characterized by significant volatility, marked by a severe contraction in 2019 followed by a robust recovery and record-level profitability by the end of the period.
- Operating Profit Margin Trends
- The operating profit margin experienced extreme fluctuations, starting at 6.29% in 2017 and rising to 9.68% in 2018. A sharp reversal occurred in 2019, where the margin plummeted to -12.29%, indicating that operating expenses exceeded revenues during that fiscal year. A recovery phase began in 2020 with a margin of 4.76%, culminating in a peak of 19.98% in 2021, which represents a substantial increase in operational efficiency.
- Net Sales and Operating Earnings Correlation
- Net sales increased from US$ 7.41 billion in 2017 to US$ 12.36 billion in 2021. While sales remained relatively stable between 2018 and 2020, operating earnings demonstrated high instability, swinging from a loss of US$ 1.09 billion in 2019 to a gain of US$ 2.47 billion in 2021. The disproportionate increase in operating earnings relative to the growth in net sales during 2021 suggests a significant expansion in margins, likely driven by favorable pricing or reduced operating costs.
- Operational Turnaround Analysis
- The transition from a negative margin in 2019 to a nearly 20% margin in 2021 reflects a rapid recovery in profitability. The increase in operating earnings from US$ 412.9 million in 2020 to US$ 2.47 billion in 2021 highlights a strong upward trajectory in the company's ability to convert sales into operating profit.
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Net Profit Margin
Mosaic Co., net profit margin calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings (loss) attributable to Mosaic | 1,630,600) | 666,100) | (1,067,400) | 470,000) | (107,200) | |
| Net sales | 12,357,400) | 8,681,700) | 8,906,300) | 9,587,300) | 7,409,400) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 13.20% | 7.67% | -11.98% | 4.90% | -1.45% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Linde plc | 12.42% | — | — | — | — | |
| Sherwin-Williams Co. | 9.35% | — | — | — | — | |
| Net Profit Margin, Sector | ||||||
| Chemicals | 11.22% | — | — | — | — | |
| Net Profit Margin, Industry | ||||||
| Materials | 13.59% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
Net profit margin = 100 × Net earnings (loss) attributable to Mosaic ÷ Net sales
= 100 × 1,630,600 ÷ 12,357,400 = 13.20%
2 Click competitor name to see calculations.
The financial performance of Mosaic Co. between 2017 and 2021 is characterized by significant volatility in profitability, culminating in a period of substantial expansion in both revenue and net margins by the end of the analyzed timeframe.
- Net Profit Margin Volatility
- A cyclical pattern of profitability is observed from 2017 through 2020. The net profit margin fluctuated from -1.45% in 2017 to 4.90% in 2018, followed by a sharp decline to -11.98% in 2019. A recovery occurred in 2020, with the margin returning to a positive 7.67%.
- Profitability Acceleration
- The year 2021 marked a peak in operational efficiency, with the net profit margin reaching 13.20%. This represents the highest margin within the five-year period and indicates a significant improvement in the company's ability to convert sales into actual profit.
- Revenue and Earnings Correlation
- A strong correlation between top-line growth and bottom-line profitability is evident in 2021. Net sales increased to US$ 12.36 billion, the highest value in the reported period, which coincided with a record net earning of US$ 1.63 billion. This suggests that the scale of operations expanded while simultaneously improving the percentage of profit retained per dollar of sales.
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Return on Equity (ROE)
Mosaic Co., ROE calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings (loss) attributable to Mosaic | 1,630,600) | 666,100) | (1,067,400) | 470,000) | (107,200) | |
| Total Mosaic stockholders’ equity | 10,604,100) | 9,581,400) | 9,185,500) | 10,397,300) | 9,617,500) | |
| Profitability Ratio | ||||||
| ROE1 | 15.38% | 6.95% | -11.62% | 4.52% | -1.11% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Linde plc | 8.69% | — | — | — | — | |
| Sherwin-Williams Co. | 76.50% | — | — | — | — | |
| ROE, Sector | ||||||
| Chemicals | 12.24% | — | — | — | — | |
| ROE, Industry | ||||||
| Materials | 16.54% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
ROE = 100 × Net earnings (loss) attributable to Mosaic ÷ Total Mosaic stockholders’ equity
= 100 × 1,630,600 ÷ 10,604,100 = 15.38%
2 Click competitor name to see calculations.
The profitability profile between 2017 and 2021 is characterized by significant volatility in net earnings, resulting in fluctuating returns for stockholders' equity. While the equity base remained relatively stable throughout the period, net income experienced multiple cycles of losses and gains, culminating in a strong performance peak in the final year of the analyzed timeframe.
- Net Earnings Volatility
- Net earnings displayed an erratic pattern, with losses recorded in 2017 and 2019. The most significant contraction occurred in 2019, with a loss of 1,067,400 thousand USD. A substantial recovery followed, with earnings increasing from 666,100 thousand USD in 2020 to 1,630,600 thousand USD in 2021, marking the highest net income within the five-year period.
- Stockholders' Equity Stability
- Total stockholders' equity showed minimal variance relative to the volatility of net income. The balance fluctuated between a low of 9,185,500 thousand USD in 2019 and a high of 10,604,100 thousand USD in 2021. This suggests that the periods of net losses did not fundamentally erode the company's capital base, which remained consistently positioned around the 9 billion to 10 billion USD range.
- Return on Equity (ROE) Dynamics
- The ROE mirrored the volatility of net earnings. Following a negative return of -1.11% in 2017 and a sharp decline to -11.62% in 2019, the ratio rebounded significantly. The ROE improved to 6.95% in 2020 and reached a period high of 15.38% by December 31, 2021. This trajectory indicates a substantial increase in the efficiency of generating profits from shareholders' investments toward the end of the period.
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Return on Assets (ROA)
Mosaic Co., ROA calculation, comparison to benchmarks
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Net earnings (loss) attributable to Mosaic | 1,630,600) | 666,100) | (1,067,400) | 470,000) | (107,200) | |
| Total assets | 22,036,400) | 19,789,800) | 19,298,500) | 20,119,200) | 18,633,400) | |
| Profitability Ratio | ||||||
| ROA1 | 7.40% | 3.37% | -5.53% | 2.34% | -0.58% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Linde plc | 4.69% | — | — | — | — | |
| Sherwin-Williams Co. | 9.02% | — | — | — | — | |
| ROA, Sector | ||||||
| Chemicals | 5.56% | — | — | — | — | |
| ROA, Industry | ||||||
| Materials | 6.65% | — | — | — | — | |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).
1 2021 Calculation
ROA = 100 × Net earnings (loss) attributable to Mosaic ÷ Total assets
= 100 × 1,630,600 ÷ 22,036,400 = 7.40%
2 Click competitor name to see calculations.
The financial performance from 2017 to 2021 is characterized by significant volatility in earnings, culminating in a strong recovery and growth phase. A cyclical pattern is evident, with alternating periods of net losses and profits that directly influenced the efficiency of asset utilization.
- Net Earnings Volatility
- Net earnings exhibited substantial fluctuations throughout the period, recording losses in 2017 and 2019. The 2019 fiscal year represented the most significant deficit, with a loss of 1,067,400 thousand US$. However, a consistent upward trajectory was established beginning in 2020, leading to a peak of 1,630,600 thousand US$ by 2021.
- Asset Base Evolution
- Total assets remained relatively stable between 2017 and 2020, fluctuating within a range of approximately 18.6 billion to 20.1 billion US$. A notable expansion occurred in 2021, with assets increasing to 22,036,400 thousand US$, suggesting an increase in the company's overall investment in its resource base.
- Return on Assets (ROA) Trends
- The ROA mirrored the instability of net earnings, moving from -0.58% in 2017 to a low of -5.53% in 2019. A sharp reversal followed, with the ratio climbing to 3.37% in 2020 and reaching 7.40% in 2021. This progression indicates a significant improvement in profitability relative to the asset base, reflecting higher operational efficiency and stronger bottom-line performance toward the end of the five-year period.
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