Philip Morris International Inc. (NYSE:PM)

The analysis of the financial ratios over the five-year period reveals several notable trends in operational efficiency, liquidity, leverage, and profitability.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios exhibit a decline from 2021 to 2023, dropping from around 0.76-0.78 to approximately 0.54. However, there is a partial recovery in 2024, with ratios climbing back to near 0.61-0.62. This pattern suggests a reduction in asset efficiency during the middle years, followed by some improvement in the latest period.

Current Ratio

The reported and adjusted current ratios show a downward trend from 2020 to 2022, decreasing from approximately 1.1 to near 0.72. This decline implies reduced short-term liquidity or a tighter working capital position. From 2022 onwards, the ratios slightly increase to 0.88-0.89 by 2024, indicating some restoration of liquidity.

Debt to Capital

The reported debt to capital ratio steadily decreases from 1.66 in 2020 to 1.26 in 2022, implying a reduction in reliance on debt financing. However, from 2023 onward, the ratio increases modestly to 1.35 by 2024. The adjusted debt to capital ratio mirrors this trend, declining initially from 1.52 to 1.12 before rising slightly to 1.21. These changes may reflect varying capital structure strategies, with a move toward deleveraging followed by moderate re-leverage.

Net Profit Margin

The reported net profit margin peaks near 29% in 2021 before experiencing a significant decline to 18.63% in 2024. The adjusted net profit margin presents greater volatility, starting at 23.34% in 2020, rising sharply to 35.42% in 2021, and then falling to a low of 15.17% in 2023, with a partial rebound to 20.19% in 2024. This variability suggests fluctuating profitability and possible impacts from non-recurring items or adjustments affecting reported earnings.

Return on Assets (ROA)

Both reported and adjusted ROA indicate a positive but downward trend over the period. The reported ROA declines from approximately 18% in 2020 to around 11.4% in 2024. Adjusted ROA shows similar patterns, with initial growth up to 27.49% in 2021, then a pronounced drop to 8.26% in 2023 before rising slightly to 12.56% in 2024. This trend reflects diminishing asset profitability, partially offset in the most recent year.

No data are available for debt to equity, financial leverage, or return on equity ratios, limiting the ability to analyze these dimensions.

Overall, the data depict a period characterized by initial strong performance in profitability and asset efficiency, followed by deterioration through 2022 and 2023, and signs of stabilization or modest recovery in 2024. Liquidity tightened over the period but also showed improvement in the final year. Capital structure adjustments seem to reflect a strategic shift toward lower leverage mid-period with a slight reversal thereafter.

The financial data demonstrates a positive trajectory in net revenues over the observed periods. Net revenues increased consistently from US$28,694 million in 2020 to US$37,878 million in 2024, reflecting a steady growth trend.

Total assets show fluctuating behavior. After an initial decline from US$44,815 million in 2020 to US$41,290 million in 2021, total assets substantially increased to US$61,681 million in 2022 and continued to rise to US$65,304 million in 2023, before slightly decreasing to US$61,784 million in 2024. This fluctuation suggests significant asset acquisitions or revaluations occurred primarily between 2021 and 2023.

The reported total asset turnover ratio reflects efficiency in using assets to generate revenues and fluctuates inversely with the total assets trend. It rose from 0.64 in 2020 to 0.76 in 2021, likely due to a decrease in total assets despite revenue growth. Thereafter, the ratio declined sharply to 0.51 in 2022, consistent with the dramatic increase in total assets, before improving gradually to 0.61 by 2024. This pattern indicates some period of reduced asset utilization efficiency as the asset base expanded rapidly, with recovery signs in the later years.

Adjusted total assets and their turnover ratios show trends very similar to the unadjusted figures, with slight differences in magnitude. Adjusted total assets move from US$43,428 million in 2020 down to US$40,465 million in 2021, then sharply rise to US$61,120 million in 2022 and US$64,569 million in 2023, followed by a moderate decrease to US$60,891 million in 2024. The adjusted total asset turnover ratio rises from 0.66 in 2020 to 0.78 in 2021, then drops to 0.52 in 2022, stabilizing and slightly improving to 0.62 in 2024. These adjusted figures reiterate the story of fluctuating asset efficiency aligned with significant asset changes.

Overall, the company has demonstrated solid revenue growth alongside considerable changes in its asset base. The total asset turnover ratios suggest periods where increased assets temporarily outpaced revenue growth, impacting asset utilization efficiency. However, there is a positive trend in improving turnover ratios towards the end of the period, which may signal enhanced operational efficiency or optimized asset deployment moving forward.

The financial data reveals several noteworthy trends in liquidity and working capital management over the five-year period analyzed.

Current Assets

The value of current assets declined from 21,492 million US dollars in 2020 to 17,717 million US dollars in 2021, indicating a significant reduction in liquid resources. This was followed by a gradual recovery, with current assets increasing to 19,619 million in 2022, 19,755 million in 2023, and 20,170 million in 2024. Despite this recovery, the 2024 level remains below the 2020 peak.

Current Liabilities

Current liabilities grew steadily over the period, starting at 19,615 million US dollars in 2020 and increasing to a peak of 27,336 million in 2022. Subsequently, liabilities slightly decreased to 26,383 million in 2023 and further declined to 22,915 million in 2024. This pattern suggests elevated short-term obligations particularly in 2022, with some easing in the following years.

Reported Current Ratio

The current ratio exhibited a deteriorating trend from 1.1 in 2020 down to a low of 0.72 in 2022, signifying reduced short-term liquidity and potential challenges in meeting immediate liabilities. The ratio improved slightly to 0.75 in 2023 and further increased to 0.88 in 2024, though it still remained below the threshold of 1.0, indicating current liabilities exceeded current assets.

Adjusted Figures

Adjusted current assets and liabilities follow similar trajectories as the reported figures, with adjusted current assets falling to a low around 2021 before recovering gradually, while adjusted current liabilities peaked in 2022 and then decreased subsequently. The adjusted current ratio reflects the same trend as the reported ratio, highlighting liquidity compression in 2022 followed by partial recovery, increasing from 0.72 in 2022 to 0.89 in 2024.

Overall, the data suggests that the company experienced a tightening liquidity position with a peak in current liabilities in 2022, which adversely impacted the current ratio and indicates increased short-term financial pressure during that year. Although liquidity ratios improved in the subsequent two years, they remained below one, signaling ongoing attention to working capital management. The gradual recovery in current assets combined with the reduction in liabilities points to efforts to strengthen the short-term financial position post-2022.

Total debt

The total debt exhibited a decreasing trend from 31,536 million US dollars in 2020 to 27,806 million US dollars in 2021. However, a significant increase occurred in 2022, reaching 43,123 million US dollars, followed by a further rise to 47,909 million US dollars in 2023. In 2024, the total debt slightly decreased to 45,695 million US dollars but remained substantially higher than the levels observed in 2020 and 2021.

Total PMI stockholders’ deficit

The stockholders' deficit showed a generally improving trend from 2020 through 2022, moving from -12,567 million US dollars down to -8,957 million US dollars. However, in 2023, the deficit increased again to -11,225 million US dollars and further to -11,750 million US dollars in 2024, indicating a reversal of the earlier improvement and a deterioration in equity position.

Adjusted total debt

The adjusted total debt followed a pattern similar to the total debt, starting at 32,243 million US dollars in 2020 and decreasing to 28,342 million in 2021. There was a pronounced increase in 2022 to 43,737 million, rising further to 48,562 million in 2023, before slightly declining to 46,299 million in 2024. These figures suggest increasing leverage levels after 2021.

Adjusted total stockholders’ deficit

The adjusted total stockholders' deficit improved notably from -11,017 million US dollars in 2020 to -4,772 million US dollars in 2022, reflecting a reduction in deficit and an enhancement in the adjusted equity base. Nonetheless, this improvement was not sustained, as the deficit worsened again to -7,737 million in 2023 and further to -8,142 million in 2024, indicating increased adjusted equity erosion in the last two years.

Total Debt

The total debt exhibited fluctuations over the observed period. It decreased from US$31,536 million in 2020 to US$27,806 million in 2021, then increased significantly to US$43,123 million in 2022, followed by a further rise to US$47,909 million in 2023, before slightly declining to US$45,695 million in 2024.

Total Capital

Total capital showed a declining trend from US$18,969 million in 2020 to US$17,700 million in 2021. However, it then experienced a substantial increase in 2022 to US$34,166 million and continued to grow to US$36,684 million in 2023, before a slight decrease to US$33,945 million in 2024.

Reported Debt to Capital Ratio

This ratio decreased steadily from 1.66 in 2020 to 1.26 in 2022, indicating an improvement in capital structure with relatively lower debt levels compared to capital. Nonetheless, it moderately increased to 1.31 in 2023 and further to 1.35 in 2024, suggesting a slight increase in leverage during the last two years.

Adjusted Total Debt

The adjusted total debt followed a pattern similar to total debt, starting at US$32,243 million in 2020, decreasing to US$28,342 million in 2021, then sharply rising to US$43,737 million in 2022 and further to US$48,562 million in 2023, before a minor decrease to US$46,299 million in 2024.

Adjusted Total Capital

Adjusted total capital increased from US$21,226 million in 2020 to US$20,290 million in 2021, then more than doubled to US$38,965 million in 2022. It continued to rise to US$40,825 million in 2023, with a slight decline to US$38,157 million in 2024.

Adjusted Debt to Capital Ratio

This ratio declined consistently from 1.52 in 2020 to 1.12 in 2022, signaling a strengthening of the capital base relative to debt. Similar to the reported ratio, it increased slightly to 1.19 in 2023 and 1.21 in 2024, indicating a modest rise in financial leverage in the most recent years.

The financial data reveals several notable trends concerning the company's asset base and stockholders’ equity position over the reviewed period.

Total Assets

Total assets experienced a decline from US$44,815 million at the end of 2020 to US$41,290 million in 2021, indicating a contraction in asset base during this interval. However, a significant rebound followed in 2022, with total assets rising sharply to US$61,681 million, followed by further growth to US$65,304 million in 2023. In 2024, total assets slightly decreased to US$61,784 million but remained substantially higher than the levels observed in 2020 and 2021.

Total PMI Stockholders' Deficit

The stockholders’ deficit showed a trend of reduction in magnitude from US$-12,567 million in 2020 to US$-8,957 million in 2022, suggesting an improvement in the equity position. Nevertheless, this trend reversed in 2023 and 2024, where the deficit expanded to US$-11,225 million and US$-11,750 million respectively, indicating a deterioration in stockholders’ equity during these years.

Adjusted Total Assets

Adjusted total assets closely parallel the pattern of total assets, declining slightly from US$43,428 million in 2020 to US$40,465 million in 2021, then increasing substantially to US$61,120 million in 2022 and further to US$64,569 million in 2023. A modest decline is again observed in 2024, dropping to US$60,891 million. These adjustments reinforce the overall growth pattern identified in total asset values after 2021.

Adjusted Total Stockholders’ Deficit

The adjusted stockholders’ deficit improved significantly from US$-11,017 million in 2020 down to US$-4,772 million in 2022, reflecting an enhanced equity position on an adjusted basis during these years. Similar to the unadjusted deficit, this trend reverses in 2023 and 2024, with adjusted deficits widening to US$-7,737 million and US$-8,142 million respectively, suggesting some weakening in equity despite prior gains.

Overall, the data indicates a period of asset contraction early on, followed by considerable asset growth starting in 2022. Concurrently, the stockholders’ deficit decreased in the earlier years, implying improvement in financial stability, yet this was offset by increased deficits in later years. The adjusted figures confirm these patterns, highlighting similar trends in asset adjustment and equity metrics. The absence of reported financial leverage ratios limits a deeper analysis of the impact of liabilities relative to equity and assets.

Over the analyzed period, net revenues demonstrated a general upward trend, increasing steadily from approximately $28.7 billion in 2020 to nearly $37.9 billion in 2024. This growth suggests positive top-line performance and possibly expanding market presence or pricing adjustments.

In contrast, net earnings attributable to the entity showed fluctuation with a peak around 2021 reaching about $9.1 billion, followed by a decline to approximately $7.1 billion by 2024. This reduction despite revenue growth could indicate rising costs, investments, or other factors impacting profitability.

The reported net profit margin mirrored the net earnings trend. It rose slightly from 28.08% in 2020 to 29% in 2021, then gradually decreased to 18.63% by 2024. This decline in margin percentage signals decreasing efficiency in converting revenue into actual profit or increasing expense pressures.

Adjusted net earnings exhibited significant variability. It sharply increased from around $6.7 billion in 2020 to over $11.1 billion in 2021, then decreased to about $5.3 billion in 2023 before partially recovering to $7.6 billion in 2024. This volatility could reflect non-recurring items, adjustments for unusual expenses or revenues, or changes in accounting policies.

The adjusted net profit margin followed a similar volatile pattern, peaking impressively at 35.42% in 2021, then declining to 15.17% in 2023, and improving to 20.19% in 2024. This indicates considerable fluctuations in core profitability when adjusting for non-standard items, suggesting periods of both strong operational performance and challenges.

Summary of Trends and Insights

The revenue growth across the period under review is a positive sign, indicating expanding business activities.

The decline in net earnings and profit margins despite growing revenues suggests increasing cost pressures or other factors impacting bottom-line profitability.

The considerable volatility in adjusted net earnings and margins highlights fluctuations in adjusted business performance, potentially influenced by exceptional items.

The overall decreasing trend in profitability ratios in the latter part of the period calls for a closer examination of cost structures, pricing strategies, and non-operational impacts.

The financial data reveals several key trends over the five-year period from the end of 2020 to the end of 2024. Net earnings attributable to the company demonstrate an overall downward trajectory with some fluctuations. Starting at 8,056 million USD in 2020, net earnings increased to a peak of 9,109 million USD in 2021, slightly declined to 9,048 million USD in 2022, and then fell more sharply to 7,813 million USD in 2023 and 7,057 million USD in 2024. This indicates increased pressure on profitability in the latter years.

Total stockholders' deficit exhibited notable variability, though it remained negative throughout the period. The deficit decreased (improved) substantially from -12,567 million USD in 2020 to -8,957 million USD in 2022, suggesting a strengthening of the equity position during this timeframe. However, it deteriorated again in 2023 and 2024, reaching -11,225 million USD and -11,750 million USD respectively, signaling a weakening of financial standing towards the end of the period.

Adjusted net earnings, which may exclude certain non-recurring items or other adjustments, show a less consistent pattern. After rising sharply from 6,696 million USD in 2020 to 11,123 million USD in 2021, adjusted earnings dropped to 9,244 million USD in 2022 and fell further to 5,336 million USD in 2023 before partially rebounding to 7,649 million USD in 2024. This suggests significant volatility in the core earning power of the business, with a strong recovery in adjusted earnings in the final year.

Adjusted total stockholders’ deficit reflects a similar trend to the unadjusted deficit but with higher values (less negative magnitudes), moving from -11,017 million USD in 2020 to -4,772 million USD in 2022, indicating improvement. Nonetheless, it worsened in the subsequent years to -7,737 million USD in 2023 and -8,142 million USD in 2024. This pattern points to partial equity strengthening in the middle of the period but challenges remaining later.

Data for reported and adjusted Return on Equity (ROE) percentages are not provided, which limits the ability to directly assess profitability relative to equity. Overall, the period is characterized by initial improvements in earnings and equity positions up to 2021-2022, followed by declines and volatility in both earnings and equity through to 2024. These trends suggest that the company faced increasing financial pressures in the more recent years covered by the data.

The financial data over the five-year period reveals notable fluctuations in key profitability and asset metrics. Net earnings attributable to the company exhibit a peak in 2021, reaching 9,109 million US dollars, followed by a steady decline through subsequent years to 7,057 million US dollars in 2024. This downward trend signifies a reduction in realized profit after 2021.

Total assets demonstrate an overall increase, rising significantly from 44,815 million US dollars in 2020 to a high of 65,304 million US dollars in 2023, before slightly retracting to 61,784 million US dollars in 2024. This suggests growth in the asset base during the period, with a slight contraction in the most recent year.

Reported return on assets (ROA) parallels the net earnings trend but with more pronounced volatility. Starting at 17.98% in 2020, ROA peaks at 22.06% in 2021, then declines sharply to 11.42% by 2024, indicating a diminishing efficiency in asset utilization to generate profits over time.

Adjusted net earnings, which may represent normalized or non-GAAP measures, show significant variability. After increasing sharply from 6,696 million US dollars in 2020 to a peak of 11,123 million US dollars in 2021, adjusted net earnings decline steeply to 5,336 million US dollars in 2023. An uptick to 7,649 million US dollars in 2024 signals some recovery but not to prior peak levels.

Adjusted total assets follow a similar path to reported total assets, increasing from 43,428 million US dollars in 2020 to 64,569 million US dollars in 2023, then decreasing marginally to 60,891 million US dollars in 2024. This supports the inference of asset expansion followed by a minor decrease in the latest period.

Adjusted ROA, reflecting profitability relative to adjusted asset base, exhibits considerable fluctuations. It rises sharply from 15.42% in 2020 to 27.49% in 2021, then declines steeply to 8.26% in 2023, before improving to 12.56% in 2024. Despite some recovery, the adjusted ROA in 2024 remains notably below the highs observed in 2020 and 2021.

In summary, the data indicates that the company experienced peak profitability and asset efficiency in 2021, followed by declines in both earnings and returns on assets in subsequent years. Asset growth was robust through 2023 with modest retraction in 2024. Adjusted performance measures corroborate these trends, though adjustments tend to magnify the volatility observed in reported figures. The partial recovery in 2024 suggests some stabilization but at levels below earlier peaks.