Philip Morris International Inc. (NYSE:PM)

The data reflects a notable variability in profitability ratios over the observed period. Return on Assets (ROA) exhibits a peak in 2021, reaching 22.06%, followed by a steady decline through 2024, where it decreases to 11.42%. This represents a reduction of nearly half from its highest point, indicating a diminishing efficiency in asset utilization to generate profits.

Information regarding Financial Leverage and Return on Equity (ROE) is absent, which limits the ability to fully assess the company's capital structure and shareholder return dynamics.

Return on Assets (ROA)

2020: 17.98%

2021: 22.06% (peak)

2022: 14.67% (noticeable decline)

2023: 11.96% (continued decrease)

2024: 11.42% (lowest in the period)

The observed decline in ROA after 2021 suggests potential challenges in maintaining asset profitability, which could be attributable to various factors such as increased costs, lower revenue growth, or changes in asset base. Without data on leverage and equity returns, it remains difficult to correlate these trends with financial structuring strategies or shareholder value generation.

Net Profit Margin

The net profit margin demonstrated a relatively strong performance at the start of the observed period, with a value of 28.08% at the end of 2020. It increased slightly to 29% in 2021, then decreased slightly to 28.49% in 2022. However, from 2022 onwards, there is a notable declining trend, with the margin falling to 22.21% in 2023 and further to 18.63% by the end of 2024. This indicates a reduction in profitability relative to sales over the years, especially in the last two reported years, which may reflect higher costs or reduced pricing power.

Asset Turnover

The asset turnover ratio exhibits some volatility throughout the period. It started at 0.64 in 2020, increased significantly to 0.76 in 2021, indicating improved efficiency in generating revenue from assets. However, the ratio sharply declined to 0.51 in 2022, which suggests a drop in asset utilization effectiveness. In 2023, the ratio showed slight improvement to 0.54, and further increased to 0.61 in 2024, indicating a partial recovery in asset turnover but still below the 2021 peak. Overall, the trend suggests fluctuation and a recent effort to improve asset management efficiency.

Financial Leverage

Data for financial leverage across all reported years is not available, which limits the ability to analyze the company's debt utilization or risk profile.

Return on Equity (ROE)

Return on equity data was not provided for any of the reported years, restricting assessment of overall shareholder return and profitability relative to equity invested.

The financial data reveals several notable trends over the five-year period from 2020 to 2024. The tax burden ratio has shown relative stability initially, maintaining around 0.77 for the first three years, with a slight increase to 0.80 in 2022, followed by a decline to 0.70 by the end of 2024. This suggests some fluctuation in effective tax rates or tax-related expenses, culminating in a reduced tax burden in the latest year.

The interest burden ratio exhibits a gradual downward trend, starting at 0.93 in 2020 and slowly decreasing to 0.85 by 2024. This decline indicates a growing impact of interest expenses on earnings before interest and taxes (EBIT), potentially reflecting increased interest costs or changes in debt structure.

Concerning profitability, the EBIT margin has steadily decreased from 38.9% in 2020 to 31.25% in 2024. The most significant drop occurred post-2021, highlighting a compression in operating profitability. This pattern may point to rising costs, pricing pressures, or shifts in the cost structure affecting operational efficiency.

In terms of operational efficiency as measured by asset turnover, the ratio increased from 0.64 in 2020 to 0.76 in 2021, indicating improved utilization of assets to generate sales. However, this was followed by a sharp decrease to 0.51 in 2022, with a modest recovery to 0.61 in 2024. The volatility suggests fluctuations in asset management or sales volume during this period.

The data for financial leverage and return on equity (ROE) are missing, limiting the ability to assess the company's use of debt financing and overall equity profitability directly.

Summary of Key Trends

Tax burden showed initial stability with a later decline.

Interest burden gradually increased, indicating higher interest costs relative to EBIT.

EBIT margin consistently declined, suggesting reduced operational profitability.

Asset turnover was volatile, reflecting inconsistent asset efficiency.

Financial leverage and ROE data were unavailable, restricting comprehensive return analysis.

Net Profit Margin

The net profit margin exhibits a declining trend over the analyzed period. Starting at 28.08% in 2020, it slightly improved to 29% in 2021 but then experienced a consistent decrease through subsequent years, reaching 18.63% by the end of 2024. This suggests reduced profitability relative to revenue over time.

Asset Turnover

The asset turnover ratio shows some fluctuation. After an initial increase from 0.64 in 2020 to 0.76 in 2021, it dropped sharply to 0.51 in 2022. From 2022 onward, there is a moderate recovery, reaching 0.61 by 2024. Overall, asset utilization efficiency weakened significantly in 2022 but has since improved slightly.

Return on Assets (ROA)

Return on assets declined steadily from 17.98% in 2020 to 11.42% in 2024. The highest point was in 2021 at 22.06%, followed by a notable decrease in the following years. This decline reflects lowered effectiveness in generating profit from the company’s asset base.

Overall Analysis

The combined analysis of profitability and efficiency indicators highlights a general downward trend in financial performance. Both profitability (net profit margin) and asset efficiency (asset turnover and ROA) saw deterioration after 2021, indicating challenges in maintaining revenue margins and efficient asset use. Despite a slight rebound in asset turnover post-2022, the continued declines in net profit margin and ROA suggest persistent pressures on profit generation and asset deployment efficiency.

The company’s financial indicators over the five-year period demonstrate notable trends in profitability, efficiency, and burden ratios.

Tax Burden

The tax burden ratio remained relatively stable at 0.77 in 2020 and 2021, before increasing slightly to 0.8 in 2022. In the subsequent two years, there was a noticeable decline to 0.77 in 2023 and further to 0.7 in 2024, indicating a decreasing effective tax rate or improved tax efficiency in the later years.

Interest Burden

This ratio was consistently high from 2020 to 2022, maintaining around 0.93 to 0.94, suggesting stable interest expense management during this period. However, there was a decline starting in 2023, dropping to 0.87, and continuing to 0.85 in 2024, which may indicate an increased interest expense relative to earnings before interest and taxes, potentially due to higher debt servicing costs or lower operating income.

EBIT Margin

The EBIT margin showed a declining trend over the five years. Starting from 38.9% in 2020, it peaked slightly higher at 39.86% in 2021, then steadily decreased to 37.97% in 2022, reaching 33.2% in 2023 and further down to 31.25% in 2024. This trend suggests decreasing operational profitability or increasing operating costs relative to sales.

Asset Turnover

The asset turnover ratio displayed fluctuations. It increased from 0.64 in 2020 to 0.76 in 2021, indicating improved efficiency in generating sales from assets. However, it sharply declined to 0.51 in 2022, then gradually recovered to 0.54 in 2023 and 0.61 in 2024. Despite this recovery, the ratio did not return to the peak observed in 2021, which may reflect changes in asset utilization or sales volume.

Return on Assets (ROA)

ROA experienced a marked decrease over the period. It increased from 17.98% in 2020 to 22.06% in 2021, demonstrating improved overall profitability relative to assets. Subsequently, it declined significantly to 14.67% in 2022 and continued falling to 11.96% in 2023 and 11.42% in 2024. This downward trajectory aligns with the observed decline in EBIT margin and the fluctuations in asset turnover, signaling reduced efficiency in generating profit from the company’s asset base.

In summary, the company’s operational profitability and asset efficiency indicators showed a peak around 2021, followed by a consistent decline through 2024. Although the tax burden became more favorable in the last two years, increased interest costs and decreasing operating margins have contributed to lower returns on assets. The fluctuations in asset turnover highlight variability in the company’s ability to leverage its assets to generate sales, which together with profitability pressures, potentially reflects challenges in maintaining growth and cost control.

Tax Burden

The tax burden ratio remained relatively stable at 0.77 from 2020 to 2021 and in 2023, showing a slight increase to 0.8 in 2022 before declining to 0.7 in 2024. This indicates a modest fluctuation in the proportion of earnings retained after taxes, with a noticeable reduction in 2024 suggesting higher effective tax expenses or tax-related impacts.

Interest Burden

This ratio exhibited consistency around 0.93-0.94 from 2020 through 2022, indicating stable interest expense levels relative to earnings before interest and taxes. However, a decline to 0.87 in 2023 and further to 0.85 in 2024 suggests an increase in interest expenses or reduced operational earnings, exerting downward pressure on profitability before tax.

EBIT Margin

The EBIT margin showed a downward trend over the period, beginning at 38.9% in 2020 and peaking slightly at 39.86% in 2021. This margin subsequently declined each year, falling to 37.97% in 2022, 33.2% in 2023, and reaching 31.25% in 2024. The decreasing margin reflects rising operating costs or pricing pressures negatively affecting operating profitability.

Net Profit Margin

Net profit margin also trended downward from 28.08% in 2020, increasing slightly to 29% in 2021, before a gradual decline commenced. By 2022, the margin decreased to 28.49%, followed by a sharper decline to 22.21% in 2023 and 18.63% in 2024. This significant reduction indicates escalating costs, increased interest burdens, tax impacts, or other factors eroding the company's bottom-line profitability over time.